Record Levels Of Optimism Have Been Reported Among Small Businesses

Owners of small and medium-sized enterprises (SMEs) in the UK are reporting record levels of confidence, new research reveals.

This is one of the findings of the latest annual Business Growth Survey from Santander Corporate & Commercial, which shows that 20 per cent of small business owners believe their company is in the best shape it has ever been in, indicating a somewhat significant increase from last year's 13 per cent.

In addition, those with an annual turnover of up to £20 million are predicting their revenue will increase by an average of 33 per cent over the coming year, which indicates the highest level of optimism since Santander began the poll three years ago.

An increased number of SMEs also reported they were exploring acquisitions as an option for growth, with this rising from 14 per cent in 2013 to 17 per cent this year. One-quarter (25 per cent) said they were looking to grow specifically in their region, while six per cent of respondents stated they were exploring international markets for expansion.

Staff retention intentions were on the up as well, with 30 per cent viewing keeping their current workers as an immediate priority, indicating an increase of 11 per cent from last year.

Furthermore, 12 per cent of small businesses said they were focusing on hiring new personnel over the coming months, although 57 per cent stated their most important priority was ensuring the survival of their firm.

Managing director of SME Banking at Santander Marcelino Castrillo commented: "It's extremely encouraging for UK plc that business confidence in the UK is at its highest level for three years, with businesses focused on growth both at home and overseas.

"The outlook for staff retention and new job creation is also positive, which is welcome news for the wider UK economy."

However, the survey also uncovered some of the challenges most commonly faced by SMEs in the UK, with 47 per cent finding the current trading environment 'tough' and 22 per cent struggling to reduce their outgoing costs.

Expert Opinion

Confidence is higher than ever for SMEs and it will be interesting to see how they intend to move forward in light of this positivity. <br/> <br/>"Planning and preparation remains absolutely key for small businesses which are looking to develop their offerings and we would urge them to take every possible step to pull together robust and comprehensive strategies for the year ahead. <br/> <br/>"External advice is vital in this regard and help from legal experts is particularly key, as it will ensure that any plans are compliant with key regulations and legislation." Fergal Dowling - Partner