Small Business Growth Opportunities in 2012: An Analysis
I was recently left mystified after reading several articles about forecast growth opportunities for small businesses in 2012, some of which state SMEs are confident about their prospects next year, whilst others claim the Government is stunting development. I decided to investigate further, and discovered that much relies on the Autumn Statement recently issued by the Chancellor.
Grounds for Optimism
A poll conducted by Experian reveals that 70 per cent of SMEs are expecting sales growth in 2012. Almost one in five (18 per cent) also plan to increase their headcount this year
45 per cent of SME owners in the Experian poll claimed they had access to cash reserves they could use to fund their growth activities, while 19 per cent had money set aside to cover emergencies
More than a third of small businesses using an appeals process set up following the Project Merlin agreement have successfully challenged a bank’s decision to reject a loan application. (Project Merlin includes a deal between the Government and high street banks that enables companies with fewer than 10 employees and sales of less than £25m to request a second opinion if they believe they have been unfairly declined lending)
The Autumn Statement announced: A new credit easing programme for SMEs worth up to £40bn, and business rate relief extended to 2013 for small businesses
Grounds for Scepticism
A survey conducted by skilledpeople.com showed that 7 in 10 business owners feel that the Government is not doing enough to help growth. 50% would like to see more flexible employment laws introduced; 38 per cent would like to see business rates reduced; 30per cent would like the Government to introduce lower levels of corporation tax, while 29 per cent of business owners want to see the Government provide tax breaks to employ unemployed people
The Autumn Statement announced: Overall economic growth for 2012 has been revised down from 2.5 per cent to 0.7 per cent
Based on this evidence, I conclude that despite the announcement that anticipated overall UK economic growth will be lower than initially expected, there are still ample grounds for optimism given the new credit easing programme and self-predictions for growth that many SMEs report. The latter indicates than many business owners are successfully navigating and adapting to the recession with careful business planning and budgeting.
John Davis is Managing Director of Business Centric Services Group (BSCG).