Future looks bright for Britain’s SMEs
Small and medium sized enterprises (SMEs) operating within the UK could be set for great things after projections claimed they will see considerable growth in coming years.
According to data, smaller businesses are the most optimistic in the UK and forecast increases in turnover of an average 69% compared to just 25% amongst medium sized enterprises.
This is according to the Santander Corporate & Commercial Business Growth annual survey and is based on projections for the next five years.
Focusing on growth
The main force driving this confidence is the growing focus which businesses are placing on the concept of growth.
Firms of all sizes are looking for ways to nurture their company and grow their business with a lot of them (52%) viewing organic growth as the most important priority to focus on in the short-term.
This coincides with the fact that 30% of SME leaders view business survival as their main priority – a figure which was much higher last year when 57% of SMEs put this first.
As well as considering general growth as important to their business’ survival and expansion, entrepreneurs are also keen to invest in their staff.
A large proportion of businesses (31%) see retaining existing employees as their top priority but this doesn’t mean that fresh recruitment won’t also occur as the economy continues to pick up with almost one fifth (18%) planning such activity.
Addressing challenges
While the overall situation gives SMEs plenty to smile about it is not without its challenges and entrepreneurs named tough trading conditions (27%), the ability to hire and retain the right staff (17%) and gaining sufficient access to capital (11%) as their biggest worries.
The last of these is a particularly important concern which all businesses are likely to face at some stage of their development. When this happens it is vital that they can retain their profitability as failure to look after the finances can result in dwindling figures.
In worst case scenarios it can even prompt business leaders to consult with an insolvency practitioner who can advise on how to avoid insolvency.
Thankfully it seems that the message is getting through with the number of firms worried about finances lessening year by year from 25% in 2014 and 26% in 2013.
The number of businesses worried about trading conditions also dropped – from 47% last year – so that only staffing caused more concern as the number of SMEs worrying about it rose from 14%.
By Phil Smith