A report by cloud accounting software company Xero identified business confidence as one of the most important factors in continuing success for small businesses.
Formula for Economic Growth
Xero’s report, ‘The UK Small Business Market Study,’ was based on a survey of 1,350 UK SME owners undertaken by research agency Colmar Brunton. 53% of these SME owners said that business
confidence and optimism was key to running a successful business.
However, while 52% of those surveyed believed that the UK economy will grow in 2016, only 36% said they were optimistic about the future of business.
Striving or Struggling?
When asked if they were striving or struggling, 59% of SME owners surveyed defined their businesses as striving, while the other 41% defined their companies as struggling.
The research found that the owners of the ‘striving’ companies tended to:
- use more technology within their business
- have strategic business plans in place
- have ambitions to grow their business
- have a more positive attitude
- be open to advice.
Gary Turner, Xero UK Managing Director, said: “Small businesses are significant economic drivers, improving their outlook lifts the entire economy. My advice to these businesses is to have a firm grasp on your finances and don’t be afraid to enlist the support of a strong collaborative network: family, advisors and mentors, an accountant or financial advisors. These two elements provide the formula for success.”
The Sticking Points for Small Business
77% of the SME owners said there are still recurring business difficulties they would like to resolve. Among their chief concerns were:
- Managing staff and clients (23%)
- Cash flow management (19%)
- Lack of time to work on the business rather than in the business (19%)
As cash flow management, together with specific late payment problems, is a recurring concern among small business owners, it’s not surprising that ONS statistics show 58% of small businesses don’t make it to their 5th birthday.
If your business is struggling, it’s worth considering those features above that were common to most striving businesses: greater use of technology, a good business plan, ambition, optimism and a willingness to seek and take advice. Are these features that you see when you look at your business? If they’re not, then perhaps it’s time to make them part of your business and your goals, helping to ensure your business doesn’t become part of the failing 58%.