More than half (53%) of the UK’s small & medium sized businesses (SMBs) confirm that business confidence and optimism is a key component to managing a successful business. According to research released today and conducted by Xero, business confidence is the key contributor to business success and economic growth. Developing and maintaining this SMB business confidence is critical to the UK’s economic health.
According to recent research by BIS, SMBs make up a staggering 99.8% of the British economic engine, generate 47% of revenue and employ 60% of the workforce. The economy’s increased focus on small businesses is driven by an understanding of how this grouping of commercial enterprises make up the backbone to the UK.
Xero surveyed over 1,300 of these SMB owners in the UK to uncover the formula for success. The results reveal that business confidence is one of the most significant contributors to their success, and with this confidence SMBs invest in themselves. These investments, through hiring, generate future success and concurrently for the wider benefit to the economy, growth.
Figures from the Office of National Statistics reveal3 that in spite of 58% of UK businesses closing before their 5th birthday, (startups are the most vulnerable, making up 44% of those closures), drop off rates significantly decline over time as businesses learn, become more resilient, adapt to challenges and build confidence.
The findings from the Xero research show that currently 52% of SMBs are positive about the future, with just over half believing that the UK economy will grow in 2016. Over a third (36%) of UK SMBs feel optimistic about the future of business. However, the majority (77%) still have business pain points they’d like resolved, including; managing staff and clients (23%), cashflow management (19%) and having time to work on the business (19%), rather than in the businesses.
Encouragingly for the UK’s future economic outlook, businesses that are striving make up the majority of SMBs surveyed (59%), with a respective (41%) of companies struggling.The key differentiator between these two categories of company is that striving companies are more likely to use tools and technology within their business operations and are more likely to have a strategic approach, with business plans in place. They’re also more likely to have growth ambitions (42%), more positive attitudes and more open to advice.