Hopes of Autumn turnaround for SMEs

Despite a twelve-year low in the percentage of small businesses predicting growth over the summer months (24pct), two in three enterprises say they are working hard on plans to secure future growth – and there is a four-year peak in the percentage of contracting businesses working on turnaround plans – according to new research from Novuna Business Finance. 

Nationally, two in three small business owners (66pct) said they are working on initiatives to secure growth in the future – with year-on-year rises in the percentage of enterprises focusing on keeping fixed costs down (62pct, up from 58pct last year), improving cashflow (34pct, up from 31pct) and managing late payment (26pct, up from 24pct). Other growth projects that small business owners are prioritising include: investing in new equipment (16pct), expanding into new overseas markets (16pct), hiring new staff (15pct) and reassessing their funding arrangements (13pct).

Significantly, the Novuna Business Finance data reveals that 69pct of those small businesses that forecast contraction between July and September are working on growth plans in an attempt to turn around their growth forecasts in the final months of the year. The percentage of contracting businesses working on turnaround plans stands at a four-year high.By industry sector, small business owners in manufacturing (84pct), media (75pct), construction (73pct) and retail (71pct) are most likely to be working on new growth initiatives – with figures all up on this time last year. Across eleven industry sectors surveyed, there has been a year-on-year increase in the percentage of small businesses working on initiatives to secure future growth.

Novuna Business Finance Head of Insight Jo Morris said, “After a very challenging summer trading period, which saw small business growth outlook fall to a record low, this research may offer hope of improving business confidence heading into the autumn months.

“Our data conveys a real sense of resilience across the SME community. Even at a time when market conditions have  been challenging, two in three are taking steps to strengthen their business for the future. The fact that so many businesses experiencing contraction over the summer are investing time and resources to improve their outlook presents a basis for confidence for the months ahead.

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