Research by Hitachi Capital’s quarterly British Business Barometer has shown that SMEs’ plans for growth have remained almost unchanged from this time last year, despite the economic uncertainties 2016 has brought.
A Rollercoaster Ride
Reporting on the results in a news post, Hitachi said, “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.”
The survey of 1,123 UK SMEs showed that just like last year, the top priority for these smaller businesses is to keep costs down, with 37% of businesses (as opposed to 36% last year) saying that this is most important. Like last year, 18% are determined to improve cash flow, but this has climbed into second place on the priority table this year, swapping places with expansion into new or overseas markets – now in third place (down to 17% from 19% last year).
In fourth place, as it was last year, is being stricter with getting paid on time (down from 16% to 15%), while hiring people still sits in fifth place, with 13% naming this as a priority as opposed to last year’s 15%.
Sector Differences
While this table has remained relatively unchanged overall, there are differences in priorities between sectors when you drill down into the results. More physical sectors such as manufacturing, construction and agriculture are less concerned about getting paid on time and instead plan to invest in new equipment to support their growth.
In the manufacturing sector, while 46% of SMEs surveyed said keeping costs down was their main priority, investing in new equipment came second, with 30% identifying this as most important for their growth. At the other end of the scale, only 11% of retail-based SMEs saw the purchase of new equipment as a priority.
Keeping costs down remained the highest priority in every sector.
Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance, commented: “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 which 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.”