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|No change for UK SMEs on growth plans|
|Tuesday, 11 October 2016|
New research from Hitachi Capital’s quarterly British Business Barometer has found that SMEs plans for business growth are being held firm from twelve months ago despite the economic and political uncertainty that has unfolded over the last year.
The last twelve months have felt like a roller coaster ride for many firms in the UK. The pound hit the lowest it has been in 30 years and there is understandable uncertainty around the political situation. However, SMEs are showing resilience and their plans on how to grow their company have stayed the same.
Hitachi Capital Business Finance asked 1,123 of the UK’s SMEs what one thing they are considering applying to their business in order to achieve growth in the next three months. With only a 1% change from 12 months ago, the top priority for small and medium sized enterprises over the last year remains to keep fixed costs down (37% 2016, 36% 2015).
Year on year, there has been little movement on what remains important to small businesses to help with growth, showing that SMEs are still looking after the pennies in order to progress. While keeping fixed costs down has been slowly on the increase, expanding into new markets/overseas has dropped slightly lower in rank from second place to third place by -2% (17% 2016, 19% 2015).
Breaking the findings down by sector, the top five remains fairly unchanged. However, some industries that require more physical work such as manufacturing, construction and agriculture are less concerned about getting paid on time and instead are wanting to invest in new equipment to support growth.
While expanding into new markets/overseas is less of an issue for those in the agriculture industry (2%), it is those in the retail sector that have slightly different requirements when it comes to the top five things they are considering to apply to their business in order to grow. Different from other sectors, 11% of SMEs that work in retail are thinking about reassessing finance commitments, putting it at equal importance with investing in new equipment (11%) and making their top five more about money than the national average.
Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance comments: “The results of the survey suggest that small companies’ appetites for expansion and improving reserves are on the cards to reach their commercial goals. While our barometer indicates many SMEs want to grow, we’ve seen in the market that many are failing to be convinced that the financial services sector is prepared to be a long-term partner and can be trusted to look after small businesses through all phases of the business cycle. This is a very chastening view and one that is undoubtedly holding back UK success. As a manufacturing-based funder which prides itself on the consistent support we offer SMEs, we clearly have yet to get our message fully across that we are here to provide unpressured enduring partnerships that allow companies to safely prosper.”
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