By Daniel Hunter
The Thinking Bigger Report, issued by SAP (UK) Limited, indicates that UK small to medium sized enterprises (SMEs) are considerably optimistic about their growth expectations for the year ahead, with more than 95% of SMEs citing growth as their number one goal.
Despite the negative economic outlook and ongoing disruption throughout the Eurozone, the majority of SMEs are expecting to not only survive but also prosper, anticipating 10% year-on-year growth.
In addition to positive sentiments towards growth, the report found that SMEs fall into distinct camps when it comes to their approach to achieving this goal: ‘Accelerators’ who are more bullish, aiming to grow their business ahead of industry norms, and ‘Stabilisers’ who are relatively less ambitious and seek to grow in line with competitors.
The independent industry report, commissioned by SAP, of 250 senior managers from UK-based SMEs explores their appetite and capabilities for growth, focusing on four key areas: technology, innovation, money and finance, and management. The survey results demonstrate the extent to which these areas are being exploited by SMEs in order to achieve competitive advantage.
Key findings of the report include:
• 96% of SMEs are looking to grow their businesses and more than eight in ten (81%) are confident in achieving their planned growth objectives
• Just under half (48%) of SMEs are expecting to grow by more than 10% year-on year
• 30% of SMEs are seeking to grow at a faster rate than their competitors, whilst two thirds (66%) are expecting to grow in line with the competition
• Over two in five SMEs rate growth over commercial stability, seeing it as a greater priority for the next two years
• SMEs are most likely to rate money and finance as key drivers for growth (62%), followed by innovation (56%), management (49%) and technology (33%)
In terms of the relative challenges each of the four key areas present, SMEs cite money and finance to be the biggest issue (49%), followed by innovation (23%), with management and technology both regarded as less problematic (14% each).
“The findings from the report are encouraging for SMEs of all size and industry. Maintaining a positive outlook is key for SMEs to ensure they continue on their growth course despite a volatile economy, which has now become the ‘new norm’,” John Antunes, director SME & Channels SAP UKI, said.
Dr. Rebecca Harding, CEO of Delta Economics, comments: “These findings demonstrate how SMEs are innovating and growing to keep our economy afloat during difficult times. It is encouraging to see just how important innovation is and that businesses will keep innovating even in tough times. Success is non-negotiable and although growth is not a strategic priority for many at the time being, this is an understandable by-product of the fact that finance is tight.”
In stark contrast to the ambitions for growth amongst UK SMEs, just 4% claimed to not be looking to grow their business.
Antunes concludes, “In recessionary times some observers would assume that UK SMEs are happy to ‘batten down the hatches’ or consolidate their current market position. This report shows the contrary. There is actually significant appetite amongst UK SME businesses to be ambitious and grow,whether this is at a conservative rate as indicated by the ‘Stabilisers’, or more aggressively as shown by the ‘Accelerators’. Thinking Bigger involves spending valuable resource wisely in key areas that will have maximum impact on business performance, better equipping SMEs to adapt to the ‘new norm’; SAP intends to help SMEs achieve this.”
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