Despite a 12-year low in the percentage of small businesses predicting growth over the summer months (24%), two in three enterprises say they are working hard on plans to secure future growth – and there is a four-year peak in the percentage of contracting businesses working on turnaround plans – according to research from Novuna Business Finance.
Nationally, two in three small business owners (66%) said they are working on initiatives to secure growth in the future – with year-on-year rises in the percentage of enterprises focusing on keeping fixed costs down (62%, up from 58% last year), improving cashflow (34%, up from 31%) and managing late payment (26%, up from 24%). Other growth projects that small business owners are prioritising include: investing in new equipment (16%), expanding into new overseas markets (16%), hiring new staff (15%) and reassessing their funding arrangements (13%).
Significantly, the Novuna Business Finance data reveals that 69% of those small businesses that forecast contraction between July and September are working on growth plans in an attempt to turn around their growth forecasts in the final months of the year. The percentage of contracting businesses working on turnaround plans stands at a four-year high.
By industry sector, small business owners in manufacturing (84%), media (75%), construction (73%) and retail (71%) are most likely to be working on new growth initiatives – with figures all up on this time last year. Across 11 industry sectors surveyed, there has been a year-on-year increase in the percentage of small businesses working on initiatives to secure future growth.
Jo Morris, Head of Insight at Novuna Business Finance commented: “After a very challenging summer trading period, which saw small business growth outlook fall to a record low, this research may offer hope of improving business confidence heading into the autumn months. The data conveys a real sense of resilience across the SME community. Even at a time when market conditions have been challenging, two in three are taking steps to strengthen their business for the future. The fact that so many businesses experiencing contraction over the summer are investing time and resources to improve their outlook presents a basis for confidence for the months ahead.
“Many small businesses are focusing on measures to manage late payments and to protect cash flow, whilst others are investing in new machinery and looking at efficiency gains that can help improve profitability. At Novuna Business Finance, we continue to support established businesses by helping them finance essential assets, enabling them to preserve cash flow and ease pressure on other areas of their budget. Taking a flexible approach gives small businesses greater scope to plan ahead and invest in opportunities that power future growth.”
Novuna Business Finance provides funding solutions to SMEs and large businesses across the UK, including asset finance, stocking finance, block discounting and sustainable project finance.