Approximately half of small businesses in the UK expect their turnover to increase in the next 12 months, according to research by the Department for Business, Innovation and Skills.
The Small Business Survey 2014 is based on a poll of more than 4,000 small businesses with no more than 249 employees across the UK.
The study revealed that 78% of those asked said they made a profit in the past 12 months. This is up by 6% from 2012 figures and consistent with pre-recession levels. More than a third (40%) of respondents said that their turnover had increased over the past year. This compares to the figure of 29% seen in 2012. Only 18% reported that their turnover fell in 2014.
Subsequently, small businesses have hired more in 2014 and are also planning to recruit more staff in the near future. Almost a quarter took on more staff in the past 12 months and a third of small business owners said that they intend to increase their employee headcount in 2015. This is up from a fifth three years ago.
The Business Minister, Matthew Hancock, says that the government’s aim is “to make Britain the best place in the world to start and grow a business,”’ and he believes “this is now within reach.”
“Small businesses are leading our economic recovery and we have thrown our weight behind them like never before,” adds Hancock. “Over 850,000 small businesses have benefitted from the Government’s Employment Allowance. We’ve cut back £10 billion of burdensome red tape and last year UKTI helped nearly 48,000 businesses to export more than £49 billion of goods overseas. There really has never been a better time to start a business.”
The findings have also revealed that fewer businesses are seeking finance – in 2014, only 19% had sought finance in the previous 12 months, down from 24% in 2013. The fall is driven mostly by a drop in demand for overdrafts, suggesting that fewer firms are looking for external finance for working capital or cash flow. However, in 2014 there was an increase in the proportion of businesses applying for finance to support growth and purchase equipment, vehicles, land or buildings.
The Small Business Survey’s findings seem to reflect a bright 2014 for small businesses, with a greater proportion achieving increased turnover and profit while expanding their workforce, and this suggests a positive trend that looks set to continue in 2015.
But is this your experience? Did your small business flourish in 2014 or falter? Please let us know your thoughts in the comments below, and share this article so that others can join in the conversation too.