Small Businesses Make Big Push for the UK’s Recovery

The green shoots of recovery can be seen in the fields of small businesses. In the last year, small businesses have increased their workforce, turnovers and profits. Better still, the optimistic trend is forecasted to continue into the next 12 months.

The Department for Business, Innovation and Skills conducted a poll with over 4,000 small and medium-sized enterprises. It found that:

• 78% have made a profit in the past year and are back pre-financial crisis levels;
• Almost half say their turnover is greater than the same time last year whereas only a third of businesses made the same claim in 2012;
• Only 1/5 had a decline turnover, compared with 1/3 in 2012;
• In the next year, around half of the businesses forecasted an increase in turnover, compared with just over a third of the businesses in 2012;
• 22% had recruited more staff in the past year, compared with 19% in 2012.

Furthermore, the type of finance being sought by businesses has changed. In terms of overdrafts, only 1/5 firms sought finance in the previous year, as opposed to 1/4 firms in 2012. Commentators suggest that this drop is down to fewer businesses seeking loans to help cash flow. This is contrasted with a marked increase in the number of firms seeking external finance to aid growth and purchase equipment and property.

Business minister Matthew Hancock said: “Small businesses are leading our economic recovery and we have thrown our weight behind them like never before. 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 export more than £49 billion of goods overseas. There really has never been a better time to start a business.”

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