Almost eight out of 10 (79%) small business owners expect to grow their companies over the next 12 months. This is the encouraging data emanating from recent research carried out by American Express and Small Business Saturday UK. This survey also discovered that exactly the same percentage (79%) believe their business is currently in good shape. This compares to 74% a year ago.
Despite the challenging trading environment, which many small businesses still face, almost two-thirds (64%) are forecasting that business performance during the final quarter of 2023 will be better than for the same period in each of the two previous years. Only approximately one in seven (15%) believe it will be worse.
That said, an annual survey of 1,000 UK SME owners and decision makers found that, collectively, more than one-third (35%) believe running a business has become more difficult during the last year.
Inflation is playing its part, with over half (53%) of respondents explaining how the rising cost of goods is likely to be their biggest challenge during the final two quarters of 2023. This includes higher prices for both services and energy.
Tax rises and labour issues are also a concern, with 57% of respondents admitting that cash flow challenges have hampered their growth ambitions. But the survey did highlight that a significant proportion of SME businesses remain upbeat and are examining ways to counter any problems.
Three out of every 10 owners (30%) are planning to increase marketing activity, around one-quarter (25%) aim to diversify their offerings, while one-fifth (20%) are going to invest in new technology.
Amanda Salt, the vice-president of Small & Medium Enterprises, UK Card Services, at American Express, said: “While SMEs continue to face a challenging environment, there are real signs of positivity in our research.
“Business owners and leaders feel confident about the future, and have plans to invest across a number of areas of their operations. Our focus is on backing these businesses and the entrepreneurs that run them. We want to help them drive growth and succeed in the future.”
This in-depth research also investigated the state of entrepreneurialism in the UK. Respondents were asked whether they thought the general public understood the difficulties involved in being a small business owner.
When asked whether small businesses deserve better recognition for their contribution to the economy and local community, over eight in 10 (82%) said entrepreneurship should be celebrated more. Three-quarters (76%) are calling for greater support from the Government, who they believe should implement measures to encourage small business growth.
When asked ‘Who do you turn to for advice and support’, more than one-third (37%) say they seek out fellow business owners and entrepreneurs – rather than contact family, friends or trade associations. Seven in 10 (70%) believe that the challenges of the past three years have made them more resilient as a business leader.
Michelle Ovens, director of Small Business Saturday UK, added: “It’s been another really tough year for small businesses, so it’s great to see the tide starting to turn and businesses regaining confidence.
“Behind our nation’s 5.5m small firms are real people who have shown phenomenal bravery, determination and resilience in the face of everything that has been thrown at them during recent years.
“With over one-third admitting it is becoming increasingly harder to run a small business, and three-quarters feeling there needs to be more recognition of entrepreneurship, this means we need to support them more than ever. We must celebrate their incredible impact on local communities and the wider economy.”
As for small business owners, Kaye Sotomi – the founder of the hair salon chain Chop Chop London – stressed: “I’m confident and excited about the future but aware that I’ll face hurdles as I continue to grow my business.
“I certainly share the same sentiments as my fellow small business owners who took part in this survey. I’ll be looking to protect my business from rising costs, by strategically investing in activities that I know will make a difference to my business.”
And entrepreneur and small business consultant, Carl Reader, explained: “Small businesses are the backbone of our economy. Most SME owners would agree that their business is similar to looking after a new born baby. Both require a similar level of round-the-clock care and support.
“This is why entrepreneurship should be more celebrated in the UK. Whether it’s about visiting more small businesses, or offering discounts to small business owners, we can all play a role in championing our fantastic SME community.”