Many small and medium UK businesses are gaining confidence in the near future, despite the challenges of the coronavirus pandemic, a new study suggests.
After a dire 2020, two-thirds of UK companies have said they are optimistic about their growth prospects in 2021, with younger entrepreneurs being most optimistic about the near future.
It comes when Prime Minister Boris Johnson set a date for the end of all restrictions yesterday – June 21, the first day of summer – when he unveiled the government’s “ road map ” to phase out the lockdown in England.
A ray of hope? Two thirds of UK SMEs expect to grow within the next 12 months
According to plans, non-essential retailers, including hairdressers, clothing stores, gyms and open-air restaurants and pubs, could reopen on April 12, while the rest of restaurants and pubs and theaters would reopen on May 17, lifting all social restrictions on 21st of June.
A global survey of 3,000 companies in six countries, including the UK, by digital accounting platform Dext found that 66 percent of UK SMEs expect to grow within the next 12 months.
That rises to 75 percent of businesses owned by younger entrepreneurs between the ages of 18 and 34, while the same percentage of businesses are run by 35 to 44 year olds looking to grow their business this year too.
Older generations were slightly less optimistic than their younger counterparts, with just over half, or 52 percent, of business owners aged 55 or older believing they will recover and thrive this year.
The survey contrasts with recent findings from the Federation of Small Businesses, which said in January that confidence was at rock bottom and that at least 250,000 small businesses could shut up for good this year.
Short-term outlook for small businesses
Percentage of SMEs that expect to grow within the next 12 months:
South Africa 74%
Source: Dext’s global survey of 3,000 companies in six countries
Just under 5 percent of the 1,400 companies surveyed by the FSB said they expect to close within the next 12 months, putting the UK on track to lose more than a quarter of a million businesses.
Adrian Blair, the CEO of Dext who conducted the survey, said he was “surprised” by the optimism found in small businesses, but said that if it had been done a year ago, it would show a very different situation.
He added, “It is clear that while many companies are optimistic about 2021, this needs to be underpinned by solid financial planning.”
Many small businesses were mistreated in 2020, as the coronavirus pandemic swept the nation, forcing people to stay at home and close stores for much of the year.
However, as restrictions are gradually loosened, the Bank of England expects a rapid economic recovery as people rush to spend the money saved during the lockdown.
The Bank’s chief economist Andy Haldane estimates that the British will have amassed £ 250 billion in savings by June, equivalent to 20 percent of the amount households spend each year.
He believes a “ decisive corner has been turned ” thanks to the rollout of the Covid-19 vaccine – and families are ready to fuel a rapid return to prosperity with billions of pounds spent.
Emma Jones, founder of Enterprise Nation for small businesses, says in the interview below that the business community must be ready to make the most of this spend.
Emma Jones of Enterprise Nation is concerned about businesses that cannot be opened, such as barber shops and hairdressers
She says: “In the next three months we will have to turn outside again, because everyone wants to leave their home. This is about retail and services – online and physical. How are you going to face your customers again? ‘
She says companies need to think about how to make sales until they can reopen, adding, “There will be so many opportunities for small businesses – they need to prepare for the £ 250 billion they are spending.”
Some firms thrived during lockdown, but others, such as hairdressers, have suffered badly because it was impossible for them to continue doing their jobs online.
Jones adds, “Depending on what and how you sold, you’ve had a completely different pandemic. Online businesses want to invest and scale up. Companies we are concerned about are the butchers, hairdressers, those who have not been able to open. ‘
After hearing about the roadmap to exit the lockdown, small businesses are now waiting to see whether Chancellor Rishi Sunak will extend the current VAT cut, corporate rate cut and other government assistance when he unveils his spring budget on Wednesday, March 3.
Business confidence outside the UK
Measured worldwide, British business optimism ranks second after South Africa, according to the study.
Small businesses in France are the most cautious about their short-term outlook: just over a quarter (28 percent) of businesses expect things to improve. However, they are also optimistic in the longer term: 79 percent say they plan to grow.
Less than half of small businesses in the US, Canada and Australia expect to grow in the coming months.
British entrepreneurs say they want better access to available tax cuts to help them through the tough times, with more than three-quarters (76 percent) seeking help with financial planning.
Adrian Blair of Dext says: “There is no substitute for a trusted accountant to help small business owners plan their financial futures in these turbulent times. Accountants are clamoring for tools to help businesses succeed. ‘
Top 20 tips for people starting a new business
The small and medium businesses surveyed by Dext have the following tips for growing a successful business:
1. You have to be patient
2. Don’t be too depressed if success is not immediate
3. Notice the little things
4. You are not expected to know everything
5. Don’t beat yourself up when you make mistakes
6. Don’t try to do everything yourself
7. It can be a stressful process
8. Be prepared for sacrifice in your personal and professional life
9. Trust your judgment more
10. Be prepared to see things in the long run
11. Asking questions and taking opinions is a good thing
12. Marketing your business is key
13. You must be willing to customize your business offering
14. Hiring an accountant or bookkeeper will make your life a lot easier
15. Think more about cash flow
16. Building relationships with suppliers is critical
17. Connect with other new business owners
18. Running a business will involve a lot of administration
19. It can be lonely to be the founder of a company
20. Focus on one core product
Small Business Essentials
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