By Daniel Hunter
Eight in ten entrepreneurs are optimistic about their own business prospects for the coming year and half of this group are ‘very optimistic’ about the next twelve months, according to Smith & Williamson’s first quarterly survey of the enterprise sector.
Furthermore, eight in ten participants are also planning for growth or acquisition in the year ahead while a similar proportion expect to increase headcount in the next year.
"These results clearly demonstrate that entrepreneurs are bullish about the future and taking positive steps to develop their business. It is exactly this attitude that helps to explain why they are often described as the engine of our economy,” said Guy Rigby, head of Entrepreneurs at Smith & Williamson, the accountancy and investment management group.
Confidence regarding the broader economic outlook is reasonably healthy with six in ten expecting improvements in the UK economy. Furthermore, 41% of respondents indicated that they would be more prepared to take on borrowing than they were three months ago. However, there are mixed views on whether access to funding is improving.
“The view amongst entrepreneurs seems to be that the worst is behind us. If that’s the case, we’ll start to see an increasing appetite for borrowing. The spotlight will then be on the banks and whether they’re able to respond. From what we’ve seen so far from businesses that do want to borrow, there’s still a big hill to climb.”
Rigby points out that there are a number of alternative finance providers emerging, but the funds available are limited. “A combination of recession and the internet are spawning some great new platforms, such as Funding Circle, Crowdcube and MarketInvoice, but it will take time for these, and others like them, to become established.”
Respondents were split as to whether government policy is supportive of private enterprise, with half of respondents believing that the government is supportive, but the other half disagreeing.
“With the Budget just weeks away, the government has the perfect opportunity to increase its support for the enterprise economy. The nation’s entrepreneurs will create future prosperity and jobs, so making it simpler and cheaper to employ people is key. In my personal view, some relief from National Insurance and the abandonment of pensions auto-enrolment for small firms would be a good start.”
Not all the views from respondents were wholly positive. Tristram Mayhew, founder of fast growing treetop adventure company Go Ape sees ‘consumer confidence and willingness to spend discretionary income’ as a potential barrier to growth.
"The recession has not produced the predicted high unemployment, yet those in work are also spending less. Highly paid professionals, with strong job security, have joined in with the mass tightening of household spending. Austerity, thrift and make-do are the new, almost cool, social trends," explained Mayhew.
Smith & Williamson’s Enterprise Index will monitor the views of entrepreneurs on a quarterly basis. “Our index will help to give a true feel for what’s happening in the sector and provide insight into the type of government support which those on the ground believe would be most useful. I’m pretty sure they’re listening,” concluded Rigby.
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