Small Businesses Left Behind As Economy Expands

The UK economy may be growing strongly - but a new survey has suggested many small firms are not enjoying much benefit from this.

A Virgin Media Business poll of over 1,000 SMEs revealed 24 per cent regard the current economic climate as a major barrier to growth, while 23 per cent expect no growth in the next six months.

The survey found a number of significant barriers to expansion afflicting SME owners, not least getting the right business advice. 53 per cent of founders cited this as a real problem when starting a new enterprise, with only sorting out their tax and VAT obligations being more difficult.

Another issue seems to be the lack of knowledge of what help the government can provide; only eight per cent sought such services when they got into difficulties.

The survey also said the bulk of firms are failing to recognise the potential for growth that investment in new technology could bring. Only 20 per cent of those surveyed said that digital training is one of their key investment areas over the next five years.

Virgin Media Business spokesman Mike Smith said: "Technology has an unrivalled power to help propel businesses forward but people need the skills to be able to use it. With simpler products, better skills and backing from the top, the UK’s businesses will grow faster and that can only be good for the whole economy."

He argued that better support from industry and the government is needed to help SMEs realise the benefits that better technology can bring.

Mr Smith noted that the UK's digital economy is proportionately bigger than that of any other G20 nation, being worth eight per cent of GDP, but warned: "We risk losing this competitive advantage if we fail to enable our small businesses to use technology better."

The Virgin Media survey findings are in contrast with those arising from a Federation of Small Businesses survey published earlier this month, which found confidence levels in the third quarter of this year were at the highest level it had ever recorded.

Expert Opinion

It is interesting to see this research, with it coming after a long run of studies which have suggested high levels of confidence among small businesses and that many are feeling positive about their potential for growth as the economy continues to recover. <br/> <br/>"Perhaps most revealing is that a number of SMEs polled in this research do not feel they have had access to the advice and support they need in order to push forward – whether this comes from the government or elsewhere. <br/> <br/>"There clearly needs to be steps taken to ensure that the initiatives and opportunities open to the small business community are promoted to them, while growing firms should also ensure they recognise the important help that external sources can provide. <br/> <br/>"Legal advice in particular is a requisite and it is vital that SMEs do not ignore the importance of having experts in their corner when it comes to planning for future success." Steven Beahan - Partner