What The FSB Report Tells Us About Small Business In The UK
The Federation of Small Businesses (FSB), which represents over 200,000 small companies in the UK, released their quarterly confidence review on Monday this week. The index revealed that quarterly confidence for financial growth has more than doubled since the second quarter this year to 33.5.
The FSB defines small companies as an organisation with 9 – 49 employees.
Why are small businesses more confident?
These increased confidence levels reflect Chancellor George Osbourne’s statement last week that the UK economy is “turning a corner.”
Small businesses are crucial to the UK economy. SMEs generate half of GDP and two thirds of jobs in the UK.
Whereas medium- and large-sized companies are expecting to see cuts in budgets, 54.2% of smaller firms have ambitions of rapid or moderate growth over the next year, up 4.2% from last year. Additionally, 21% of firms are looking to increase investment in the next 12 months, the highest figure since the report began in 2010.
John Allan, FSB Chairman, said, “Small firms are clearly helping the economy gain momentum compared to the same point last year.”
Growing confidence in the economy stems from growing confidence in online marketing
The report shows that the biggest beneficiary of UK small companies’ increased confidence is the country’s marketing departments. 26% of small firms expect to hire new marketing staff next year.
More and more firms are taking their marketing strategy online, focusing on social media and SEO to drive sales and increase brand awareness.
So it makes sense that online companies are more confident that they will experience growth in the next year, than their brick and mortar counterparts. 78% of online SMEs anticipate a rise in sales next year compared to only 27% of high street stores who said they felt the same.
This reflects Lord Young’s comments earlier this year. Young argued that the growing confidence of small businesses can be attributed to the rising influence of the internet.
Google is king
Marketing departments are becoming increasingly prominent in the day-to-day running of small businesses. Social media has demanded that companies adapt to their customers’ expectations and make their brands more interactive.
Efforts to optimise SEO, and be searchable on Google lead the small business agenda. Taking a new business online is cheaper and therefore less risky than opening up a physical office. There is more open access to markets, and free online tools help measure ROI for people with little or no marketing experience.
And, with virtual office services providing micro and small businesses with the ability to seem like they have their own office space, there really is no need to invest in property before your business is ready.
Small business confidence reflects the growing trend for online, customer-focused business and marketing techniques. Overall, this is good news for the UK economy as the rush to get social and online doesn’t seem to be slowing down.
What do you think? Contact us on our social media channels and let us know your thoughts.
Do you think small companies are more confident because they have discovered how to rule online marketing? Is the internet driving small businesses faster than they could have grown before? Will the UK economy benefit from this?