Amex research finds UK SMEs are confident in spite of challenges ahead

New American Express research finds majority of small and medium-size business owners are growing in confidence, however significant cashflow challenges remain.

Eight in 10 (79 per cent) small business owners expect to grow their business over the next 12 months an uplift of thirteen percentage points year-on-year, according to new research from American Express and Small Business Saturday UK. The survey also found the same percentage (79 per cent) believe their business is currently in good shape, (compared to 74 per cent a year ago).

Despite the challenging trading environment that many small businesses still face, almost two thirds (64 per cent) are defying the odds and forecast that business performance in the final quarter of 2023 will be better than the previous two years. Only about one in seven (15 per cent) of those surveyed believe it will be worse.

The annual Barometer survey of 1,000 UK SME owners and decision makers found that collectively over one third (35 per cent) think running a business has become harder over the last year.

Inflation is playing its part, with over half (53 per cent) of respondents citing the rising costs of goods, services, and energy as the biggest challenge to running their business in the next six months, along with fixed costs such as business rates and taxes (25 per cent), and labour (23 per cent). Almost six in 10 (57 per cent) respondents believe cashflow challenges have hampered their growth ambitions.

More positively, a significant proportion of SME businesses are taking proactive action to drive growth over the coming months; nearly one third (30 per cent) plan to ramp up sales and marketing activity, a quarter (25 per cent) aim to diversify their product or service offer, and a fifth (20 per cent) will invest in new technology.

Amanda Salt, vice president, small & medium enterprises, UK Card Services at American Express, said: “While SMEs continue to face a challenging environment, there are real signs of positivity in our research, with an uplift in business owners and leaders feeling confident about the future, along with plans to invest across a number of areas of their operations.

“Our focus is on backing these businesses and the entrepreneurs that run them - helping them drive growth and succeed in the period ahead.”

The research also looked more broadly at the standing of entrepreneurialism in the UK. Respondents were asked whether they thought people understood the challenges and hard work involved in being a small business owner; responses were divided with 50 per cent agreeing and 30 per cent disagreeing.

However, there was no division when it came to the need for small businesses to be better recognised and supported for their economic and community contributions; over eight in 10 (82 per cent) believe entrepreneurship should be celebrated more, with three quarters (76 per cent) calling for greater support from the Government with measures that encourage small business growth.

When asked who they turn to for business advice and support, over a third (37 per cent) say they seek out fellow business owners and entrepreneurs who have ‘been there and done that’, ahead of other sources such as family, friends and trade associations. Seven in 10 (70 per cent) believe that the challenges of the past three years have made them more resilient as a business leader.

By Mark Adair – Correspondent, Bdaily

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