Confidence among small and medium-sized businesses is growing as more are achieving profits and expect larger turnover and workforces in the next 12 months, Government research published today reveals.
The Small Business Survey 2014 is the nation’s most reliable source of evidence on enterprise. The research finds a third of small and medium sized employers expect to employ more people in 12 months’ time, compared with one in five in 2012.
Half of the 4,355 SME employers questioned say their turnover is likely to be higher in the coming 12 months – up from 37 per cent in 2012.
Key findings of the research:
- Almost three quarters of small and medium-sized employers plan to grow their business over the next two to three years, compared with 68 per cent in 2012
- Small and medium-sized employers are recruiting more staff, with 22 per cent of the firms taking on more staff over the last 12 months, compared with 19 per cent in 2012
- Asked to look forward, 32 per cent of small and medium-sized employers expected to be employing more people in 12 months’ time, just four per cent expect to have fewer employees (21 per cent in 2012)
- Forty per cent of small and medium-sized employers reported their turnover is greater now than 12 months ago, compared with 29 per cent in 2012. Only 18 per cent report declining turnover, down from 31 per cent
- Over half (51 per cent) hope to grow their turnover over the next year, up from 37 per cent in 2012.
- Small and medium-sized employers are more profitable, with 78 per cent reporting they have made a profit or surplus in the last 12 months compared with 72 per cent in 2012.
Fewer Small and medium-sized employers are seeking finance now compared with 2012. In 2014, 19 per cent sought finance in the previous 12 months, down from 24 per cent in 2012.
The fall is driven mostly by a fall in demand for overdrafts indicating a drop in businesses looking for external finance for working capital or cash flow. However, in 2014 there was a clear increase in the proportion of businesses applying for finance to support growth and purchase equipment, vehicles, land or buildings.
The Small Business Survey 2014 provides a snapshot of the health of the nation’s businesses. This year BIS will expand the survey so going forward it can track a large sample of businesses over time to allow us to better understand the how government can best support small firms.
Today the Government also published a study into management and leadership skills.
Business leaders name entrepreneurial skills as the key to success for their firms. While many of the 2,500 small business leaders questioned said their businesses assessed their skills highly, some said they have weaknesses and can do more to improve their management skills.
The latest Global Entrepreneurship Monitor out today also underlines the strength of enterprise in the UK. Figures show that total early-stage entrepreneurial activity (TEA) now stands at 8.6 per cent in the UK in 2014, a significant increase in the 2013 figure of 7.3 per cent. The UK has pulled ahead of France and Germany in the entrepreneurship stakes.
The UK is performing particularly well in terms of new businesses with high growth expectations - almost 1 in 5 (17.6 per cent) of UK early stage entrepreneurs had high job expectations.
Entrepreneurial activity among the over-50s age group has continued to increase to reach its highest ever level of 7.1 per cent in 2014.
Notes:
- The 2014 Small Business Survey is a large-scale, representative telephone survey of business owners and managers in the UK commissioned by the Department for Business, Innovation and Skills, the Scottish Government and Invest NI. Interviews were undertaken between July and October 2014 by BMG Research Ltd.
- The survey interviewed 5,115 businesses, each employing fewer than 250 people, across the UK. Some of these were enterprises without any employees, i.e. operated by a single individual or by partners who did not employ anyone else in the business. Results for these ‘no-employee businesses’ will be published in a separate report. Today’s Small Business Survey covers the 4,355 businesses which employed at least one member of staff.
- The survey asked business managers and owners about a range of issues including recent growth in sales turnover and employment, obstacles to business success, the capabilities of owners and managers (in terms of their ability to innovate, export, train staff and so on), access to finance, and the use of business support.
- The 2014 survey is the latest of a series of similar surveys. In this report, results from 2014 are primarily compared with those from the last Small Business Survey in 2012.
- The Management and Leadership skills in SMEs research involved a survey of approximately 2,500 English SMEs with between five and 249 employees across all sectors of the economy. It examined the associations between leadership and management skills and the implementation of management best practices and how these factors are related to business performance and employment growth.
- GEM info: Compiled in the UK by Professor Mark Hart, Professor Jonathan Levie and supported by Karen Bonner and Cord-Christian Drews. A full copy of the GEM UK 2014 Monitoring Report can be found at www.aston.ac.uk/gem and www.gemconsortium.org