Small businesses are showing cautious signs of recovery, particularly in digital engagement and appetite for funding, but several critical challenges remain, including the ambition to export dropping significantly and late payment remaining a major problem, new research reveals.
Enterprise Nation’s latest Small Business Barometer concluded that the findings “paint a nuanced picture of the UK’s small business sector”.
A fifth of founders said it’s very likely their business will grow in the next 12 months, about the same as this time last year, and 43% describe themselves as digital businesses, roughly the same as in 2024.
The “digital gap” between male-led and female-led firms has narrowed significantly to just 4%, with 42% of women founders reporting adopting digital technology in Q3/Q4 of 2025, compared to 46% of male founders. In 2024, the gap was 15%.
Challenges remain though. Only 16% of small businesses currently export and just 23% would like to do so, down 3% on 2024. Also, although 47% of small businesses plan to seek external funding to fuel growth plans, up from a mid-2024 dip of 45%, it still lags behind funding ambitions in 2022 by 11%.
Late payment challenges persist, with pronounced challenges in the Wales and the West Midlands where 61% and 42% respectively say they are often paid late, further straining the resilience of SMEs.
With many businesses claiming of high recruitment costs due to government policy, a quarter of businesses surveyed said they have “no chance” of hiring in the next 12 months, although 18% said it’s “quite likely”.
Aaron Asadi, CEO of Enterprise Nation, said:
“This snapshot of our small business community reflects an ecosystem in transition. While it’s heartening to see early signs of recovery, especially in areas like funding and digital engagement, we can’t ignore ongoing challenges especially in the appetite to export.
“The persistent issue of late payments and the stark regional and gender disparities in digital adoption highlight where we must focus our support. We urge targeted measures that enhance funding awareness, bridge the digital divide with tailored training and bolster export capabilities, particularly in regions showing latent intent.
“It’s essential that we also refine business rates to better serve small firms. By taking these steps, we can ensure that every small business has the environment it needs to succeed.”