The Number Of SMEs In The UK Reached A Five-Year High In March 2014

The number of small and medium-sized enterprises (SMEs) being established in the UK has increased significantly in recent months, but this has upped competition, which is one of the biggest concerns leaders of such businesses face.

These are the findings of the latest SME tracker published by Bibby Financial Services, following the questioning of 1,000 firms. All those involved in the survey had an annual turnover of no more than £25 million and 250 members of staff at most.

A five-year peak was recorded for the period leading up to March 2014 with regard to the number of SMEs operating in the UK, showing significant recovery following the financial recession.

Data from Companies House reveals 54,336 SMEs were registered as of March this year, with this figure increasing steadily since 2009.

UK chief executive officer at Bibby Financial Services David Postings commented: "This is certainly a different picture from just a few years ago and the UK has returned to its position as a breeding ground for innovation and entrepreneurship.

"The economic downturn has fostered a DIY ethos in the country, which is now paying dividends for the economy through both recruitment and output."

However, the survey also found there were several prevalent concerns experienced by SMEs, ranging from recruitment issues to financial worries.

For instance, eight per cent of respondents said they did not think there were enough skilled candidates available to fill job roles, raising further concerns regarding progress and competition.

The latter was revealed to be the biggest threat facing firms, with 24 per cent admitting they were worried about competing against other SMEs in the growing market.

Financial concerns were also common, with nine per cent stating gaining access to finance was a particularly challenging issue and 15 per cent citing that they had worries surrounding the rising cost of raw materials.

In addition, 13 per cent of SMEs said red tape was the biggest challenge affecting their business.

Expert Opinion

It is very welcome to see a culture of entrepreneurship alive and kicking in the UK, but one of the inevitable outcomes of this increase in small businesses is that many companies of all sizes across a range of sectors are now having to face up to renewed competition in their respective areas. <br/> <br/>"Competition can of course be healthy for business and emphasises the importance of organisations having their houses in order to both take advantage of any opportunities which come their way and develop their own new innovations to put them ahead of other firms. <br/> <br/>"SMEs should ensure they have the right advisors to help them make the necessary steps forward and central to this is legal advice, with lawyers providing support on a range of matters across all areas of a business." Fergal Dowling - Partner