By Daniel Lanyon on 9th December 2016
Research by Aldemore Bank suggests small and mid-sized companies in the UK are on the whole bullish on their prospects for growth next year.
More than four in five small and medium sized enterprises (SMEs) in the UK are expecting their revenues to grow or remain the same in 2017, according to a survey by the challenger bank Aldemore.
The firm’s research, which included a survey of more than 1000 SMEs in the UK, found that despite likely economic headwinds, four in five (82 per cent) of SMEs are confident about their business performance going into 2017, either expecting their revenues to grow or remain constant during the next 12 months.
When questioned on the ongoing process of the UK leaving the European Union, a majority of SMEs said they do not expect Brexit to negatively impact their business, with two thirds (66 per cent) stating that it will either have a positive impact or no impact on their company.
Of those SMEs which export to the EU, most said they do not expect Brexit to negatively affect their business either, with 56 per cent stating they expect it to have either no impact or a positive impact on their company.
Of the 26 per cent of business owners who did anticipate a negative impact from Brexit, two-thirds are most concerned about the economic uncertainty caused by the decision and 43 per cent are also worried that UK taxes may rise as a consequence.
Carl D’Ammassa, Aldermore’s group managing director, says that despite the mixed economic news following the UK’s decision to leave the EU, SMEs remain very much focussed on growth over the coming year.
“Companies are clearly still thinking about new ways to drive their growth and as our research shows entering new markets as well as launching new products and services are high on SMEs’ agendas. This would indicate a continuing confidence in the UK economy over the next 12 months,” he said.
“Such business expansion is often underpinned by external funding or investment, and it is therefore crucial that companies can access the capital they need to realise their growth ambitions. Some SMEs will tap into their operating surpluses or personal savings but we are hoping to do more to educate businesses about other more bespoke, flexible and often cheaper options available such as asset finance and invoice finance,” he added.
Expectations vary by sector, with almost half (46 per cent) of SMEs in the hospitality and leisure sectors expecting revenues to increase. In contrast, almost a quarter (24 per cent) of legal services firms predict that their revenues will decrease in the next 12 months.
Two-fifths (39 per cent) of businesses expecting to grow in the coming 12 months will do so by launching new products and services, while three in ten (30 per cent) intend to enter new markets.
One fifth of SMEs (20 per cent) are planning to expand by enhancing their technology, and a similar number (19 per cent) are doing so by investing additional capital into their business. 16 per cent will recruit new staff to boost production.