Eight in 10 small business owners expect to see growth over the next 12 months – an uplift of 13 percentage points year-on-year, according to new research.
Researchers also found the same number believe their business is currently in good shape, And despite the challenging trading environment many still face, almost two thirds are defying the odds and forecast that business performance in the final quarter of 2023 will be better than the previous two years.
The annual Barometer survey from American Express and Small Business Saturday UK involved 1,000 SME owners and decision makers found that collectively over one third think running a business has become harder over the past year.
Inflation is playing its part, with over half citing the rising costs of goods, services, and energy as the biggest challengein the next six months, along with fixed costs such as business rates and taxes (25%), and labour (23%).
Almost six in 10 believe cashflow challenges have hampered their growth ambitions.
But more positively, a significant proportion are taking paction to drive growth over the coming months: ramping up sales and marketing activity, diversifying their product or service or investing in new technology.
Amanda Salt, Vice President, Small and Medium Enterprises, UK Card Services at American Express, said this showed “real signs of positivity with an uplift in business owners and leaders feeling confident about the future, along with plans to invest across a number of areas of their operations. Our focus is on backing these businesses and the entrepreneurs that run them – helping them drive growth and succeed in the period ahead”.
The research also looked more broadly at the standing of entrepreneurialism in the UK. Respondents were asked whether they thought people understood the challenges and hard work involved in being a small business owner; responses were divided with only half agreeing.
However, there was no division when it came to the need for small businesses to be better recognised and supported for their economic and community contributions with most believe entrepreneurship should be celebrated more.
their business is like their baby, and it requires a similar level of round-the-clock care and support, which is why entrepreneurship should be more celebrated
Michelle Ovens, Director of Small Business Saturday UK, said: “It has 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 5.5 million small firms are real people who have shown phenomenal bravery, determination, and resilience in the face of all that has been thrown at them in recent years.
“With over a third saying it is increasingly hard to run a small business, and three quarters feeling there needs to be more recognition of entrepreneurship, we need to support them more than ever, and celebrate their incredible impact on local communities and the wider economy.”
One small business owner, Kaye Sotomi, founder of inclusive hair salon chain, Chop Chop London, said she “shares the same sentiment of confidence” while being “aware that I’ll face hurdles as I continue to grow my business. I, like the survey respondents, will protect my business from rising costs by strategically investing in activities that I know will make a difference”.
Carl Reader, entrepreneur and small business consultant, said: “Most SME owners would agree that their business is like their baby, and it requires a similar level of round-the-clock care and support, which is why entrepreneurship should be more celebrated in the UK.
“Whether it’s checking in with friends and family with small businesses or offering discounts to small business owners, we can all play a role in championing our fantastic SME community.”