Small business founders pour their heart and soul into their enterprise. They live it, breathe it, and spend almost every minute of the day on it.
They are resourceful and optimistic people who can often see the shiny glint of opportunity where others cannot.
Underpinning that wide-eyed energy-fueled economic activity is confidence. Confidence is the enabler, it’s the blood that courses through the veins of entrepreneurs, it’s the magic ingredient that makes big decisions happen. Decisions like whether to invest in an innovation or fresh idea, employ a new member of staff or open a new shop in the high street.
Take away the confidence, and you have the opposite effect.
That’s why I was delighted to see in our latest Small Business Barometer that confidence amongst the UK’s smallest businesses is rebooting.
The detailed analysis suggested that start-ups, micro businesses and small businesses are beginning to pick up momentum with a stronger growth forecast for the next 12 months than we have seen for a while.
It found a fifth of small businesses (20%) said they are now expecting to reboot growth plans, up seven percentage points from 12 months ago.
It also found of those with growth plans, 34 per cent expected to grow by around a quarter, which could deliver a boost of more than £40bn to the economy at a crucial moment.
The analysis found almost (45%) half of those surveyed in late July were looking to seek investment to fuel their growth plans.
While only just over one in ten (16%) say they are currently exporting, the rate was up by two percentage points from this time last year. Firms founded by men (20%) were almost twice as likely to export as those launched by women (13%).
Of those that weren’t already exporting, one in five (20%) said they would like to, and 10 per cent of those that export said they would like to increase overseas sales.
The report also looked at digital confidence and found almost half (44%) now describe their business as ‘digital’, up by one per centage point on last year.
It’s so refreshing and positive to see confidence return after the recessionary pressures of 12 months ago, followed by the unavoidable political turbulence caused by the General Election.
After putting growth plans on hold during an extremely difficult set of challenges, it’s great that businesses can finally see the light at the end of a very long tunnel.
Our job now is to keep that confidence and momentum going in the face of the challenges ahead.
While I am always keen to keep things positive, I’m also very aware that we can’t ignore reality. Our analysis found businesses still see persistent cost pressures on consumer pockets and late payments as the key challenges ahead in the next 12 months.
The majority (60%) also warned that the current tax burden on small businesses is already too high, suggesting any of the promised tax hikes in the Autumn Budget next month, could have a negative impact on confidence as well as profits.
We must be super careful not to put the brakes on this momentum. There are ways we can mitigate challenges though. It’s now more important than ever to support businesses by offering a digital superhighway to the support they need to overcome these challenges and stay confident enough to grow.
Easy access to mentoring and advice, practical how-to videos and e-learning to boost knowledge and skills act like a shot in the arm for entrepreneurs. Add to that relevant events and networking with people who have had the experience of working through similar problems and we can overcome the barriers to meaningful growth.
Initiatives such as StartUp UK, Tech Hub and business.connected are tried and tested routes to support that already exist. They deliver a decisive boost and insulate those that use them from at least some of the challenges that come with running a business. If you understand what’s coming, you’re in a much better position to tackle it head on.
Knowledge is power as they say – but confidence is king.
