More than six in ten small business owners say they expect their business to grow this year but cost cutting is still hampering business recovery.
A new poll of small business owners has found that 61% say they expect their business to grow this year. The research, conducted by Small Business Britain in partnership with Square and Clearpay, has been published in a new report, Small Business: Moving Forward in 2023.
However, the survey results indicate that investment in core areas, including marketing and technology, is still being cut back or put on hold. The results show that:
- 54% of small businesses have not invested in digital skills or new technology this year;
- 31% of businesses have delayed marketing spend;
- 27% have cut marketing spend;
- 13% have delayed hiring new employees.
The research also found that a lacklustre seasonal trading period dented confidence and put many businesses on the backfoot. Over a third (36%) of small firms said the festive season was not as good as usual, but they got by, while 10% of businesses reported a poor season which left them worried about the future, and 7% found Christmas trading to be a major issue.
Cutting business costs
In response to falling confidence, consumer demand and rising costs, almost one fifth (17%) of businesses have delayed expansion.
"While the need to reduce costs is understandable, cutting activity in areas that drive revenue and growth, like marketing and digital, is counter-productive. There needs to be more support and encouragement for firms to use innovative approaches to marketing at lower or no cost. And more support and advice to help businesses find better ways to manage costs, whether that be sustainability savings, or evaluating and negotiating supply chains," Michelle Ovens, founder of Small Business Britain.
Small Business Britain is encouraging small firms to find alternative ways to manage costs and identify fresh opportunities, particularly through the growth area of sustainability. The report includes advice on budgeting, becoming more sustainable and building resilience.
Michelle Ovens said: "With a brightening economic picture, there is huge scope for turning the story around for small businesses. We need to hear more talk of growth, hope and opportunity. This is what will inspire more optimism and fire up the nation's 5.5 million small businesses to be the engine of growth, jobs, and innovation that the UK so badly needs."
Written by Rachel Miller.