Small businesses are shrugging off high interest rate anxiety to report the highest levels of confidence in their outlook since 2021’s lockdowns, shows the new Owner Managed Business Pulse Survey by Moore UK, the accountancy network.
Eight out of ten UK businesses (80%) surveyed say they feel confident of meeting their profit targets for 2024 – with more than nine out of ten (91%) believing their profitability will increase next year.
Maureen Penfold, Chair of Moore UK, says: “UK small businesses clearly see light at the end of the interest rate tunnel. Business owners are confident that 2024 is going to see a better economic landscape than 2023 and their businesses will see increased profits as a result.”
One in two businesses intend to grow their workforce
Moore UK’s research shows that nearly half (49%) of businesses are planning to increase their workforce in just the next three months, while only 6% expect to make layoffs. Maureen Penfold adds, “It’s promising to see that reducing headcount is far from the minds of many, even with a lot of economic black clouds still present. The coming year will see staff recruitment and retention remain a key priority as businesses continue to invest heavily in their talent.”
41% of owner-managers also said that recruitment and retention challenges had caused the workloads of their existing staff to increase in the past year, and 26% reported it had caused them to miss their growth targets.
Business owners look set to enter next year with a heightened focus on catching up on growth, with profitability (75%) and cash flow (72%) ranked as the biggest areas of focus for businesses in 2024.
Adds Maureen Penfold: “While optimism has risen, businesses haven’t lost sight of the challenges they face. They clearly believe profits are going to improve, but that is only going to be achieved through rigorous cash flow management.”
44% of businesses plan to use AI tools in their daily operations in 2024
According to Moore UK’s survey, 2024 is slated to be the year that smaller businesses embrace AI. 44% of owner-managed businesses ‘definitely’ intend to use AI tools such as ChatGPT and Chatbots in their daily operations and a further 39% ‘possibly’ intend to. Only 17% reported no intention to make use of this technology.
Adopting and implementing new technology is rated as the third biggest challenge that businesses will face over the next three months, only after interest rates and costs.
Maureen Penfold says: “Over the past year, AI has become a game-changer across the business landscape. Smaller companies are now recognising its immense potential to streamline workflows, boost efficiency and act as a powerful marketing tool. 2024 will only see this trend continue to gain momentum.”
* Survey sample size: 500 directors of UK businesses with an annual turnover between £1m-£30m participated in the survey