A quarter of small firms predict sales to rise

A quarter of small firms predict sales to rise

Small Business News – 4th March 2009

A quarter of small firms predict sales to rise

More than a quarter of small firms expect their sales to have increased in the last quarter of 2008, according to the Open University Business School.

The University’s quarterly survey found that while 39% of small firms believed their sales would have dropped in the last three months of 2008, 26% believed their sales would have risen. The majority of firms that predicted their sales would rise were from the manufacturing and business-to-business service sectors.

Commenting on the state of the business-to-business service sector, the Association of Certified Chartered Accountants’ (ACCA) SME policy adviser, Manos Schizas, said the results were broadly encouraging, but warned they might hide the real picture.

“There’s no doubt that confidence has taken a blow across all sectors, and the general consensus is that we’re not out of the woods just yet,” he said. “Most of our members are expecting trading conditions to suffer for at least another two years before things improve.”

However, he pointed out that many firms in the business services sector had been cushioned against the worst effects of the recession because of the nature of their industry.

“Finance and cashflow have topped the agenda for small firms in recent months, so the accountancy sector has probably benefited from that focus,” said Schizas. “In addition, in the face of the banking crisis many small businesses have turned away from their bank to use other forms of financial advice instead, and that is likely to have boosted the sector.”

According to Open University Business School’s professor of enterprise development, Colin Gray, those firms that viewed themselves as entrepreneurial and innovative were particularly optimistic about their future.

“Although they expect to cut employment and investment as most small firms do, they report significantly better sales, employment and investment performance and expectations than the least entrepreneurial,” he said.

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