More than two-thirds of Britain’s smallest firms expect to see growth in next six months despite Brexit, survey shows
- New Small Business Barometer to test confidence of smallest British firms biannually
- 68 per cent said they expected to grow in next six months
- 36 per cent said they were more confident about the next six months than the last, 24 per cent said they had the same confidence as previously, a quarter said confidence was worse
- Only one fifth of the firms polled export products or services
- 59 per cent said they planned to introduce more products or services in next six months
- 28 per cent said they were seeking investment
- 70 per cent think Brexit will impact new investors
- 81 per cent said they were confident that their business would be around in 12 months’ time
New research into the confidence and growth ambitions of Britain’s smallest firms has found more than two-thirds of them expect to expand in the next six months.
The authoritative new report from small business support group Enterprise Nation, which polled 800 small companies and consulted dozens more via focus groups, found an astonishing 68 per cent were expecting to swell in the last quarter of 2016, despite acknowledging Brexit uncertainty.
Of those, 59 per cent said they were planning to boost profits by introducing new products or services.
While 36 per cent said they were more confident about the next six months than previously, 24 per cent said confidence remained the same. Of those that were more confident, one fifth (20 per cent) put the increased optimism down to organic growth.
But despite the bouyance, Brexit hasn’t slipped off the agenda for this group. A quarter said they felt less confident than previously and of those, 24 per cent put this down to Brexit uncertainty, with another 16 per cent citing a less favourable economy going forward.
Interestingly, 81 per cent said they were confident their business would still be around in 12 months’ time.
The firms polled were typically trading for under six years, with more than a quarter (27 per cent) trading between one and three years. Just over half the respondents were female-run firms (51 per cent), 38 per cent were founded by men and 11 per cent run by male and female co-founders. Exactly 60 per cent were aged between 36 and 55.
Emma Jones, founder of national small business support group Enterprise Nation, said: “The smallest firms are unlike any other business community - and they remain the most optimistic despite the barrage of negativity they are constantly being exposed to.
“Firms at this stage can often pivot and adapt more quickly, as well as chase opportunity rather than being locked into contracts that begin to offer dwindling margins.
“While these firms might not have ambitions to become unicorns or gazelles, their contribution to the British economy in terms of revenue and employment cannot be dismissed.”
The survey found the growth expectations of female-founded firms were slightly lower than those of companies run by men, with 67 per cent of all women polled saying they expected to expand in the next six months, compared to 73 per cent of firms run by men. Meanwhile 68 per cent of firms with male and female co-founders said they expected to grow.
Of the one in five (21 per cent) that said they were exporting, 54 per cent of these said they expected to see growth over the next six months.
Yet 34 per cent of the more established exporters (more than six months) said Brexit had had a negative financial effect.
In terms of investment, 28 per cent said they would be looking for investment over the next six months, this was 30 per cent of female-founded firms, 25 per cent of male-run companies.
However, of those seeking investment, 70 per cent were worried Brexit would make investors more cautious.
Over the past six months, 55 per cent of male-run firms said they operated in profit, with 42 per cent of female-founded companies saying they were in profit. Despite more women than men (23 per cent v 16 per cent) saying they broke even, another 24 per cent of them were operating at a loss, while only 16 per cent of male-founded companies admitted this was the case.
Businesses in North Yorkshire were the most optimistic, with 44 per cent saying business confidence was better than the previous six months and 76 per cent expecting to see growth in the latter part of 2016/early 2017.
Meanwhile only 18 per cent of firms in the East of England said they felt more confident, the lowest in the country.
A third of companies polled in the South Yorkshire said they had been exporting for more than six months (31 per cent), the highest in any region, with the North West lagging behind all with only eight per cent exporting for any time.
Of all business sectors, retail was the most confident, with 47 per cent saying they were more confident than the last six months, followed by tech firms on 42 per cent. The sector that seemed to be least confident were food and drink, fashion and homewares and businesses services on 31 per cent.
The Small Business Barometer will be repeating these questions twice every year. It will help Enterprise Nation to build up a picture of the confidence, exporting ambitions and growth plans of Britain’s smallest firms – and the issues that impact on these sentiments.
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