a small business owner calculating on mobile
The survey shows optimism among UK SME owners for future growth. ATHIT PERAWONGMETHA/Reuters

According to recent data from American Express and Small Business Saturday UK, a majority of small business owners have expressed their intent to grow their businesses over the next 12 months.

The survey, involving 1,000 UK small business owners and decision-makers, revealed that eight out of 10 (79%) small company owners aim to develop their businesses, a thirteen percentage point increase year-over-year. The survey also found that the same number (79%) say their firm is in good form right now (compared to 74% a year ago).

Despite the harsh market environment that a lot of small businesses continue to encounter, over two-thirds (64%) believe that business performance in the fourth quarter of 2023 will be better than the previous two years. Only roughly one-seventh (15%) of those polled thought things will get worse.

According to the annual Barometer study, more than one-third (35%) believe that running a business has gotten more difficult in the last year. Inflation is a factor, the report stated, as more than half of respondents (53%) named growing costs of goods, services and energy as the most difficult barrier to running their business in the next six months.

Following these are fixed costs such as business rates, taxes (25%) and labour (23%). Almost six out of 10 (57%) respondents say cash flow issues have impeded business growth plans, the report revealed.

On a positive note, a major proportion of small and medium-sized enterprises (SMEs) are taking proactive measures to drive growth in the coming months; nearly one-third (30%) intend to increase sales and marketing activity, a quarter (25%) have the goal to diversify their product or service offering, and a fifth (20%) intend to invest in new technology.

Amanda Salt, Vice President, Small & Medium Enterprises, UK Card Services at American Express commented on the survey. She stated that while SMEs continue to face a challenging environment, there are real signs of positivity in the research.

She said there's an increase in business owners and leaders feeling confident about the future, as well as plans to invest across a number of areas of their operations. Salt noted that their focus is on assisting these businesses and the entrepreneurs who operate them in driving development and success in the next few years.

The study also took a broader exploration of the status of entrepreneurship in the United Kingdom. Respondents were asked whether they thought people recognised the challenges and hard work needed in running a small business; replies were split 50/30.

When it came to the need for small businesses to be better recognised and supported for their economic and community contributions, as was done by IOE & IT in May, there was no disagreement. More than eight in 10 (82%) believe entrepreneurship should be celebrated more, with three-quarters (76%) calling for greater government support with measures that encourage small business growth.

When asked who they look to for business guidance and support, more than a third (37%) said they seek out fellow business owners and entrepreneurs who have "been there and done that", ahead of other sources such as family, friends, and trade groups. Seven in 10 (70%) agree that the challenges of the last three years have strengthened their leadership skills.

Michelle Ovens, Director of Small Business Saturday UK said it has been another really tough year for small businesses, so it's great to see the tide starting to turn and businesses regaining confidence. Ovens stated that behind the country's 5.5 million small businesses are real people who have demonstrated incredible bravery, determination, and resilience in the face of all that has been hurled at them in recent years.

More than one-third of the SMEs admitted it is becoming increasingly difficult to run a small business and three-quarters believe there should be more acknowledgment of entrepreneurship. Reacting to this, Ovens stressed the need to help SMEs more than ever before and celebrated their incredible effect on local communities and the wider economy.

In response to the findings of the Barometer poll, some small business owners shared their thoughts. Kaye Sotomi, Founder of the Chop Chop London Inclusive Hair Salon Business echoed the sentiments of his fellow small business owners.

He expressed his optimism about the future, but at the same time, was aware that he'll face challenges as he expands his business. Sotomi, like the study respondents, plans to safeguard his business from growing costs by deliberately investing in things that he knows would benefit his company, such as sales and marketing.

Also, Carl Reader, Small Business Adviser and Entrepreneur stated the important role SMEs play in the UK economy. According to him, most SME owners would agree that their business is akin to their kid and requires the same level of care and support around the clock.

Reader added that everyone can play a role in celebrating the amazing SME community, whether it's checking in with friends and family who own small businesses or offering discounts to small business owners.