Despite 2016 pulling its fair share of surprises, from the Brexit vote to Donald Trump’s big win, SMEs are reported to be feeling confident about business next year.
Plenty of businesses have been exercising caution due to economic uncertainty, the markets reacting wildly to each news story and the pound dipping in value.
However, a new report reveals that businesses remain confident as they make plans to take them into the New Year. This comes from the latest Aldermore SME Future Attitudes report which surveyed 1,000 SMEs in the UK.
Four in five (82%) of small businesses are confident about how their businesses will perform in the new year and expect revenue to increase or at least not decrease over the next year. Of these, 39% expect their revenues to grow over the next year.
Though expectations are high, they do vary by sector. 46% of SMEs in the hospitality and leisure industry expect to grow. However, 24% of legal services firms expect their revenues to drop.
Businesses are preparing to grow, with 39% of businesses planning to do so by launching new products or services. 30% plan to enter new markets, 20% plan to enhance their technology. 19% expect to grow by investing in their business and 16% are planning to increase recruitment in order to give production a boost.
When asked about the potential effects of Brexit, most SMEs said that they were optimistic about the future and didn’t expect the vote outcome to affect their business. 56% said that they effected Brexit to have either no effect or a positive effect on their business.
On the other hand, 26% expect a negative effect on their business as a result of Brexit. Of those 64% were worried about the stability of the economy, whereas 43% were concerned that taxes might go up as a result which would have a negative effect on business.
Aldermore group managing director, Carl D’Ammassa says: ‘Despite the mixed economic news following the UK’s decision to leave the EU, it is encouraging to see that 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.’
‘Such business performance 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,’ D’Ammassa added.
Are you confident about the New Year? What are you doing to ensure growth? Let us know your thoughts in the comments!
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An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.