Half of the growth that could be achieved by the UK’s small and medium sized businesses is going unrealised, with the average firm missing out on £121,272 in sales each year, new research reveals.
Leaders not letting go of operational decisions, abandoning innovative ideas due to a lack of time and being overloaded by too many digital tools are among the factors holding back growth, according to the report by Intuit QuickBooks.
The study, in conjunction with Dr Chris Brauer of Goldsmiths, University of London and Symmetry Research, said the “growth gap” is particularly damaging for mid-sized firms which are missing out on £416,000 in annual revenue.
Two-thirds of the 1,200 SMEs taking part in the report said they are confident about future growth, but it found that “much of that ambition becomes trapped in daily operational drag”.
Almost 40% of business owners said they are nearly always involved in daily operations, with between five and six hours each week lost to “decision fatigue”.
Digital overload means a full working day is spent each week switching between up to nine different systems to keep their business running, and three in four admitted to regularly having to ditch new ideas due to limited time, capital, or focus.
Leigh Thomas, vice president EMEA at Intuit, said:
“The growth gap represents missed opportunity and a measurable economic upside. The data also shows that stronger ability to realise growth could lift revenue across the SME economy by nearly 8% annually.
“Readiness, not size, is now the true growth predictor. Leaders equipped with better connected tools and clear visibility outperform larger peers still running on manual effort and a disjointed picture of their business.”
AI is ‘the great rebalancer’
The report said “artificial intelligence (AI) is emerging as the most powerful lever for reclaiming lost capacity”.
Two fifth of businesses reported growing use of AI across functions such as finance, marketing, and operations, and 80% said the technology can help them delegate more effectively while maintaining control.
According to the report, 40% are saving 5–8 hours per week through automation, which means the equivalent of a full working day can be redirected to strategy, innovation, and client engagement.
The study defined businesses as in three stages of readiness to tackle the issues.
It said 39% of UK firms are at the high-readiness level which makes them agile, data-driven, and strategically flexible to drive growth.
Another 34% show emerging readiness which indicates stability but also some early signs of strain, and 27% of businesses are in low-readiness due to being constrained by outdated systems, financial strain, and decision fatigue.
Ciarán Quilty, senior vice-president for international at Intuit, said:
“Even though businesses are missing out on growth opportunities, the extent of their AI use makes a clear difference. Ambition is abundant, but the path to execution remains obstructed by everyday complexity.
“The challenge isn’t ambition itself, but the systems required to turn it into progress. When routine work is automated, time and visibility returns – giving leaders the insights they need, and the confidence to act with conviction.”
Among the recommendations for business leaders in the report are:
- consolidating tools so data flows seamlessly to empower faster, more confident decisions.
- standardising the routine so your judgment is reserved for the moments that truly move the needle.
- closing the skills gap with targeted upskilling and clearer roles.
- apply AI to free up time by starting with high-volume, rules-based tasks, measuring hours returned and reinvesting them into customers, product and partnerships.
Accountants are also quoted in the report, including Eriona Bajrakurtaj, CEO of Major Accounts, who shared the following tips for founders:
- Have a very clear vision of what you want to do. If you cannot see it, you won’t be able to achieve it.
- Modern entrepreneurs; if they don’t understand technology, there’s no chance of success.
- Make sure that you train yourself and your staff.
The report was released to mark the launch of AI agents on the Intuit platform to handle repetitive tasks, and support collaboration between business owners and their accountants.
The AI agents cover accounting, customer management, finance, project management and VAT.