Are British SMEs On The Brink Of Something Special?
Being the owner of a small and medium-sized enterprise (SME) between 2008 and 2013 was certainly no picnic. The UK’s economy was in the doldrums and this put paid to many entrepreneurs’ expansion plans.
While it is still far too early to get carried away, there’s no doubt that Britain’s small businesses are growing in confidence. There will come a time when many of us will cast an analytical eye over the recessionary years in an attempt to make sense of it all. As we do so, will we see 2014 as the main turning point – the year when SMEs really started to fight back?
SMEs are hiring at a rapid rate
We can always rely on hiring statistics to give us a better idea of how companies are performing. According to the Chartered Institute of Personnel & Development (CIPD), SMEs are five times more likely to recruit new employees in the next quarter than large corporations – a telling statistic indeed.
Meanwhile, a separate study commissioned by GSA Business Development and conducted by Survey Mechanics indicated that 86 per cent of small firms have reported an upturn in sales in the past 12 months. More than three-quarters of the respondents believe the economy will continue to grow in the coming year.
81 per cent think the improvements are being driven by increasing business confidence, while 78 per cent suggest that rising consumer confidence is the main reason for the economic surge. Commenting on the findings, Jonathan Silverman, managing director of GSA, said businesses are feeling “far less cautious” and are increasingly willing to invest in their operations.
Are small businesses on the edge of glory?
Most economists predicted at the end of last year that SMEs would start to gather serious momentum in 2014. Were they right? With four-and-a-half months of the year already gone, it’s fair to say the signs are encouraging.
The latest Labour Market Statistics published by the Office for National Statistics showed that 30.43 million people were in work in the first quarter of 2014 – a 283,000 increase on the period between October and December 2013 and 722,000 higher than the corresponding quarter last year. While this doesn’t tell us all we need to know, it gives us a clue as to how quickly the economy is recovering.
A recent report by the Federation of Small Businesses built on this by stating that small firms are more optimistic than they have been for a long time. The organisation’s business confidence index generated a score of 35.7, surpassing the previous record of 33.5 set in the third quarter of 2013. Just to add to the feel good factor, organisations such as the British Chambers of Commerce have upgraded their gross domestic product growth forecasts for 2014 and 2015.
Taking all of this into account, it is easy to see why excitement is building. Of course, there are plenty of obstacles for SMEs to overcome in their attempts to expand, but there is a general feeling that happier times lie ahead for small business owners. Let’s face it, they deserve it.