Despite likely economic headwinds, four in five (82%) small and medium-sized enterprises (SMEs) are confident about their business performance going into 2017, according to the latest Aldermore SME Future Attitudes report.
In a survey of 1,000 SMEs in the UK two-fifths (39%) expect their revenues to grow in the coming 12 months, by launching new products and services, whilst three in ten (30%) intend to enter new markets.
One fifth of SMEs (20%) are planning to expand by enhancing their technology, and a similar number (19%) are doing so by investing additional capital into their business. 16% will recruit new staff to boost production.
Expectations vary by sector, with almost half (46%) of SMEs in the hospitality and leisure sectors expecting revenues to increase. In contrast, almost a quarter (24%) of legal services firms predict that their revenues will decrease in the next 12 months.
When questioned on Brexit, a majority of SMEs said they do not expect the decision to leave the EU to negatively impact their business, with two thirds (66%) stating that it will either have a positive impact or no impact on their company.
Interestingly, most SMEs which export to the EU do not expect Brexit to negatively affect their business either, with 56% stating they expect to have either no impact or a positive impact on their company. This highlights businesses’ resilience when it comes to both domestic and international trade, irrespective of the outcome of the EU referendum.
Of the 26% of business owners who anticipate a negative impact from Brexit, 64% are concerned about the economic uncertainty caused by the decision and 43% are worried that UK taxes may rise as a consequence.
Carl D’Ammassa, Aldermore’s group managing director, Business Finance, said: “Despite the mixed economic news following the UK’s decision to leave the EU, it is encouraging to see that SMEs remain very much focused on growth over the coming year. Companies are clearly still thinking about new ways to drive their growth and as our research shows entering new markets as well as launching new products and services are high on SMEs’ agendas. This would indicate a continuing confidence in the UK economy over the next 12 months.
“Such business expansion is often underpinned by external funding or investment, and it is therefore crucial that companies can access the capital they need to realise their growth ambitions. Some SMEs will tap into their operating surpluses or personal savings but we are hoping to do more to educate businesses about other more bespoke, flexible and often cheaper options available such as asset finance and invoice finance.”