UK SMEs focused on growth despite economic uncertainty
The research shows resilience in the SME sector, with one third of companies identifying themselves as currently in growth phase.
Two thirds of those companies have further growth as their aspiration in spite of challenges due to economic uncertainty and the ongoing concerns around Brexit. Just over a third of those surveyed said they were currently in the sustain phase; maintaining their position, but growing profitability. Just under half of these businesses indicated that their main aspiration was to keep the business the same size, with 33 per cent looking to grow further.
Overall, 40 per cent of firms said their aspirations were for growth but they also identified a range of external factors which appear to be influencing planning priorities. Given ideal conditions, 43 per cent of respondents said their plans would include expansion of their workforce, with 33 per cent saying they would be looking to invest in product development. However, actual priorities were somewhat different, with most firms preparing to cope with rising costs, and just under a third focused on planning for any Brexit related impact.
On a more positive note, 39 per cent of firms said they were willing to take the right risks even if they were significant, with just 12 per cent saying they were completely risk averse.
Of the other key stages, around one in five firms believed their business was in a mature stage; generating revenues and profits but no longer growing, 7 per cent were diversifying, 5 per cent in a start-up phase and 2 per cent were looking to exit.
Graeme Sands, Head of Business Banking, Clydesdale and Yorkshire Banks said: “On the face of it, the figures suggest that fewer firms are either growing or looking to grow than we could usually hope for. However, when you consider the range of external factors which businesses are coping with, the picture remains positive.
“It’s clear from this report and also our own experience that the UK is blessed with many ambitious SME owners who are determined to invest and build their businesses, despite the economic uncertainty.
“With over 5 million** SMEs in the UK, all of whom will be at different stages of development, it’s critical to the future success of British industry that firms have the right support to make the most of every opportunity.
“Through our specialist lending initiatives, such as Growth Finance and the SME Cashflow proposition, we can help support businesses as they evolve, helping to guide business owners and management through each stage of the cycle, whether they’re in high growth mode or preparing for exit.”