UK small businesses are preparing for growth in 2023, despite the significant challenges presented in recent years.
A new survey by Small Business Britain found that 60% of small business owners are expecting to grow this year, with more than 16% anticipating growth over 50%, offering a new-found sense of optimism for the sector.
Opportunity for digital expansion
Almost half (46%) of small businesses say they have made efforts to ramp up digital skills amongst staff or added new technology to their business this year, with 59% feeling confident that investing in these skills and technology will positively impact their business’ future.
However, 56% of businesses are yet to invest in either area, presenting a huge opportunity for growth in the coming months.
In fact, the survey’s results indicated that investment in key areas such as marketing and technology has been put on hold for many, with 17% delaying plans to expand and 31% postponing marketing spend.
Michelle Ovens, the founder of Small Business Britain, commented:
“While the need to reduce costs is understandable, cutting activity in areas that drive revenue and growth, like marketing and digital, is counter-productive. There needs to be more support and encouragement for firms to use innovative approaches to marketing at lower or no cost. And more support and advice to help businesses find better ways to manage costs, whether that be sustainability savings, or evaluating and negotiating supply chains.”
Businesses did better in April, survey finds
Expected growth has been further fuelled by the recent news that the UK’s private sector accelerated quicker than forecast in the first few weeks of April, according to another survey of small businesses conducted by the Purchasing Managers’ Index (PMI).
The index displayed a score of 53.9 this April, compared to the 52.5 which had been predicted. This not only represents a substantial rise from 52.2 in March but also the highest score of the last 12 months.
Although, while businesses did note an increase in new orders during April, they also reported a decline in demand and manufacturing production. Goods producers said the fall in demand was preventing businesses from purchasing new stock, as customers continue to make cuts to costs as a result of the economic strain.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:
“Business services and manufacturing are clearly struggling.
“However, for now, the key takeaway is that the economy as a whole is not only showing encouraging resilience, but has gained growth momentum heading into the second quarter. The latest PMI reading is broadly indicative of GDP rising at a robust quarterly rate of 0.4%.”
Moving forward into the second quarter
To uphold this resilience in the coming quarter, businesses are being urged to develop alternative plans and market routes, in case their usual methods should let them down.
Leveraging digital tools and marketing, as well as considering different payment methods and exploring new technologies, could be key to their continued growth.
Michelle Ovens added:
“With a brightening economic picture, there is huge scope for turning the story around for small businesses. We need to hear more talk of growth, hope, and opportunity. This is what will inspire more optimism and fire up the nation’s 5.5 million small businesses to be the engine of growth, jobs, and innovation that the UK so badly needs.”
Thanks for reading
The last few years have been a particularly challenging time for small businesses, but we hope this article has provided some optimism for the next quarter.
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