By Gavin Wraith Carter
Our rolling study on the growth aspirations of the small business community provides us with a five-year panoramic view on the factors that drive confidence and proactive business planning across industry sectors and regions. Given the significance of the General Election and the UK’s preparations for Brexit negotiations last June, we focused the summer months on gaining a snapshot of what these events meant to the small business community.
The media has been awash with reports and expert comment telling us how people will react to these events – and others talking about the impact of Brexit before the negotiations have even started. We wanted to stand back from this and attempt to make sense of the world through the eyes of small business decision makers.
At a time of change, Hitachi Capital Business Finance backs the growth agenda for British business and small businesses have a key role to play. In order to help small businesses to plan and grow during a time of uncertainty – it starts with insight. It starts by listening. This report presents a snapshot of how small businesses reacted to the General Election and Brexit during the summer of 2017.
The top 10 key findings from our latest study
- Throughout 2017, two in five small businesses have predicted growth for the three months ahead and – if anything – this is a slight improvement on trends during 2016.
- The EU Referendum and the General Election votes both triggered a short-term fall in small business confidence levels, which took three months to return.
- Brexit was a key issue for many small businesses, but opinion was evenly divided between those that wanted a U-turn on the decision to leave Europe and other businesses that wanted a government to show firm leadership and get on with securing a good deal for small businesses.
- Despite the General Election uncertainty, small businesses are still planning ahead. In July 2017, three in five (61%) identified specific steps to achieve business growth in the next three-months.
- Further, around one in two (46%) business owners regard the period of uncertainty surrounding the UK’s withdrawal from the EU as presenting opportunities for their business to grow.
- The most commonly cited drivers of growth comprised of keeping fixed costs down (32%), improving cash flow (19%), becoming stricter about getting paid on time (17%) and expanding overseas into new markets (15%).
- Small business owners seeking significant growth are those most likely to be expanding into new and overseas markets, hiring more people, investing in new equipment and moving to bigger premises.
- The percentage of small enterprises confident on securing further growth from within the UK has fallen from 59% to 48% since the start of 2017. In contrast, 75% of respondents could already see growth opportunities overseas, many beyond the EU.
- Lower taxes remain a key issue for small business owners, with 35% saying they wanted a new government that could deliver this. Further, 20% would like to see the new business rates abolished altogether.
- Of the small businesses that anticipated a period of decline, 38% were hoping that a new government would reverse the decision on Brexit. This figure rose to 41% amongst the small businesses that described themselves as ‘struggling to survive’.
Gavin Wraith Carter is Managing Director, Hitachi Capital Business Finance
