Plans for business growth among SMEs are holding firm despite the economic and political uncertainty that has unfolded over the last year, according to Hitachi Capital’s quarterly British Business Barometer.
The last 12 months have felt like a roller coaster ride for many firms in the UK. The pound hit the lowest it has been in 30 years and there is understandable uncertainty around the political situation.
However, SMEs are showing resilience and their plans on how to grow their company have stayed the same.
Hitachi Capital Business Finance asked 1,123 of the UK’s SMEs what one thing they are considering applying to their business in order to achieve growth in the next three months. With only a 1 per cent change from 12 months ago, the top priority for small and medium sized enterprises over the last year remains to keep fixed costs down (37 per cent 2016, 36 per cent 2015).
Year on year, there has been little movement on what remains important to small businesses to help with growth, showing that SMEs are still looking after the pennies in order to progress. While keeping fixed costs down has been slowly on the increase, expanding into new markets/overseas has dropped slightly lower in rank from second place to third place by -2 per cent (17 per cent 2016, 19 per cent 2015).
Breaking the findings down by sector, the top five remains fairly unchanged. However, some industries that require more physical work such as manufacturing, construction and agriculture are less concerned about getting paid on time and instead are wanting to invest in new equipment to support growth.
Industries that are considering investing in new equipment in order to achieve business growth: manufacturing (30 per cent); hospitality & leisure (17 per cent); agriculture (14 per cent), construction (12 per cent); and retail (11 per cent).
While expanding into new markets/overseas is less of an issue for those in the agriculture industry (2 per cent), it is those in the retail sector that have slightly different requirements when it comes to the top five things they are considering to apply to their business in order to grow. Different from other sectors, 11 per cent of SMEs that work in retail are thinking about reassessing finance commitments, putting it at equal importance with investing in new equipment (11 per cent) and making their top five more about money than the national average.
