New research found that just 46 per cent of small businesses expect to grow in the coming 12 months – significantly less than the two thirds of their larger counterparts who believe 2017 profits will outperform those of 2016. As a result, the research uncovered a clear desire from SMEs for the Government to prioritise pro-business measures in 2017.
The survey of 1,200 small, medium and large companies across public and private sectors, reveals a gloomy growth outlook among Britain’s SMEs and start-ups, a community which fuelled nearly half of all private sector turnover in the UK last year. Top concerns about the year ahead include continued economic uncertainty, pressure to deliver increased customer loyalty and employee retention.
Against this backdrop, the research uncovered a clear desire from SMEs for the Government to prioritise pro-business measures in 2017. Three quarters of people running their own small business believe that the Government needs to do more to support their growth. The top five focus areas identified were:
A reduction in red tape
Improved access to technology and connectivity
Increased access to funding
Improve access to talent/training
Improved trade agreements
The research sheds light on why small business owners want to see action from Government in these areas.
When it comes to technology and connectivity, 72 per cent of small businesses expect technology to be an important performance driver as consumer demand for connectivity and digital products and services continues to soar.
Today, more than four in every five adults own a smartphone and nearly three quarters use a mobile to access the internet on the go, according to the latest figures from Ofcom.
As a result, more than one in three SMEs expect more customers will want to purchase products through digital means in the coming months and a quarter are expecting customers will want to access more of their products/ services online or via mobile devices.
But currently too few SMEs are set up to capitalise on these growth opportunities. The research shows only half of SMEs admit they have integrated digital into their business strategies, compared with almost three quarters of their larger counterparts and almost 40 per cent admit they are prioritising traditional means of reaching their customers.
In part this inability to capitalise can be attributed to a lack of knowledge among small businesses, with one-in-five indicating that their staff struggle to make the most of digital because they lack the skills and confidence to do so.
Commenting on the results, Ben Dowd, Sales Director at O2, said: “Technology is disrupting the way we do business across the UK, but this rapid transformation can be intimidating for small businesses. With Government committing to plans to introduce ‘world class digital infrastructure’ the pace of change is only set to accelerate, and the UK’s small businesses risk falling behind if they do not make long-term, digital first plans now.
“Embedding a pro-digital strategy that incorporates digital skills training will ensure small businesses feel more confident that they can meet the changing demands of their customers and continue to grow. With the UK’s small businesses playing such a crucial role in the UK economy, it’s vital that they are equipped with the digital skills they need to remain competitive.”
Emma Jones, Founder of Enterprise Nation, supports the calls: “’This research shows what we know to be true; that there is a way to go when it comes to small businesses making the most of the digital opportunity. What’s required is a healthy dose of training and education – and measures to boost levels of confidence in digital skills. This is what Enterprise Nation strives to do with global brands and key UK partners so all small businesses can have equal opportunity to build a home on the web, work in the cloud, work on the move, and raise profile, whilst doing this on a budget. It’s been a key target for us in 2016 and will remain a priority area for the New Year and beyond.”
The survey also shed some more positive light on the most pertinent performance drivers for SMEs in 2017. It identifies customer experience as a growth driver for ambitious SMEs in the coming year, ranking ahead of improving productivity or operational efficiency, and bringing new products or services to market.
In fact, as many as eight in ten small business owners expect delivering better customer service will bring commercial gains in 2017 and two thirds expect growth to come from delivering more personal services.
