SMEs 'Expect Growth' In 2014

The majority of businesses surveyed as part of a new study from Bibby Financial Services are optimistic about the future of the UK economy.

Research from the firm found that 60 per cent of the 1,000 SMEs surveyed think that their business will grow in the next 12 months, reports Fresh Business Thinking.

This is despite concerns about the eurozone. Although the bloc has strengthened in recent months and concerns about an imminent collapse in countries like Greece, Spain and Cyprus have passed, experts still believe issues across the continent are harming UK companies' prospects for exports.

But a strong domestic market, as well as SMEs' increasing ability to target markets in emerging areas including the Far East and the Middle East, is improving prospects across the UK.

One of the most unexpected findings from Bibby's study was that businesses in the north-east of England were among the most likely to invest in growth, with 50 per cent planning to pump money into new operations in the next year.

This was compared to the south-west of England, where it was discovered only 35 per cent of SMEs will invest for growth.

Edward Winterton, commercial director at Bibby Financial Services, said: "It's positive to find that so many businesses are expecting to achieve growth this year but it’s interesting to see that more SMEs in the north are planning to invest than those throughout the rest of the country.

"It seems that businesses in the... South of England are counting on organically rising demand as a way of achieving growth, whereas businesses in the North are taking growth into their own hands."

But no matter where an SME is located, funding remains a common issue that business owners must overcome.

Mr Winterton claims that small businesses across the country should think about approaching alternative sources for capital flow, as traditional financial institutions are often thought to be reluctant to lend to startups, mainly as they are considered risky investment options.

Expert Opinion

This is yet another study which highlights the optimism that has emerged among small businesses in recent months, with the economy continuing to improve.

"Unlike others though, this puts an interesting spotlight on the different strategies being used by smaller firms to achieve growth – with some considering a more organic approach and others actively looking to invest in order to reach their goals.

"One uniting factor however is that, regardless of plans, all small businesses need to ensure they have the right support network on hand to help them as they continue to strive towards their goals.

"This should include a range of guidance from specialist sources, including lawyers who can give advice on issues such as HR policies when growing a workforce, the introduction of staff benefits such as pensions and other regulatory support such as on transactional deals.

"It is vital that small businesses think about this and ensure they recognise that there can be some growing pains when aiming for a brighter future."

Steven Beahan, Partner