SMES Lead the Way in Business Confidence

Small firms have led a cautious rise in business optimism over the last six months, according to a survey of 2,500 businesses by remote office space provider Regus.

The firms’ bi-annual Business Confidence Index found that confidence among smaller businesses had increased at a greater rate than their larger counterparts since October 2011, when firms of all sizes reported a sharp fall.

This time around, Regus found small-business confidence had risen by six points to 88, compared to an increase of four points overall. In particular, small firms had been buoyed by signs of revenue growth, with 8% reporting increased takings, compared to 7% of larger businesses.

Despite closing the gap between small businesses and large businesses, the increase was small and total business confidence now stood at 91, still below the 100-point baseline. Moreover, two-thirds of all businesses surveyed said they did not expect economic recovery in the UK to gain full momentum until 2013. For small businesses, lack of access to cost-effective capital was the major barrier to growth.

“After a significant setback between April and October 2011, business confidence is beginning to grow again,”

said Regus regional director Celia Donne.

“In addition to this, the proportion of companies reporting revenue and profit growth has started to increase. However, businesses are still looking to cut overheads and find ways of assuring future stability and growth.”

The study reflects the findings of the Federation of Small Businesses (FSB)’s quarterly Voice of Small Business Survey published in March that found confidence low, but rising and half of small firms aiming to grow in 2012.

Like businesses themselves, the FSB was reluctant to describe the first quarter results as a sign of turnaround, saying that previous surveys had shown a similar trend towards confidence early in the year.

Small-business owner Rich Brady of Denbigh Army Surplus in North Wales said he felt the tide was turning for resilient small businesses and he was very confident about the year ahead.

“I’ve just done some online sales comparisons 2011/2 vs 2010/11 and we’re only 1.3% down on the previous 12 months. Many people will say ‘sales have declined’ but it’s not as simple as that,” Brady said. “Firstly, I think anyone in business will take static growth, given today’s economic climate. Secondly, during the last 12 months we’ve seen a massive shift in where our online sales have come from.”

“Furthermore, we’ve seen more purchases from groups, businesses and schools,”

Brady added, confirming the findings of the FSB survey.

“I spoke to a couple of business owners last week who suggested it was organisations trying to spend their budget, but we’ve seen these types of customers for three or four months, which makes me think otherwise.”

For further details on the reports mentioned above, see:

If your small business is also finding that access to cost-effective capital is a barrier to growth then read the business advice article Sources of Small Business Funding

SMES Lead the Way in Business Confidence

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