The Federation of Small Businesses reported that, for the 4th quarter of 2023, 40% of small businesses reported a fall in revenue, and confidence had also plummeted. Which makes it more surprising that, according to research by three separate organisations, optimism is high among small businesses for 2024.
Expectations for Growth in Turnover
In a recent poll by lender Iwoca, 47% of small businesses were expecting an increase in their turnover this year, compared with 23% twelve months ago. In addition, 35% of small business owners expect to be better off by the end of the year — in January 2023, this was just 16%.
This is in spite of concern remaining high about the country’s economy. 64% of respondents considered that the UK is losing its leading global position. Christoph Rieche, CEO at Iwoca, considers that, “Now that the economic environment is beginning to stabilise, SMEs can see the light at the end of the tunnel and increase their ambitions in 2024.”
Small Businesses Planning Development
This attitude of cautious optimism seems to be backed up by Novuna Business Finance’s research, which suggests that 33% of small businesses intend to boost their finances by developing new initiatives. This varies considerably by sector, with manufacturing and construction firms especially determined.
Planned approaches vary, with increasing new business and reducing fixed costs the most common stated intentions. Other approaches include diversifying into new products or service lines, and building their financial reserves.
Similarly, plans to hire new staff vary considerably. For example, finance and accounting small firms are the most likely to hire young staff, while medical and health services are placing more emphasis on finding experienced recruits. At the same time, the hospitality and manufacturing sectors seem to be concentrating more on developing their existing employees.
Small Business Optimism
A survey by NatWest suggests that SMEs are more optimistic than at any time for the past two years. However, the picture is more complex than the overall figures would suggest. More detailed analysis suggests that this growth in optimism is mainly driven by service sectors, while manufacturing and construction firms see themselves facing a more challenging future.
Whether your business’s future is looking hopeful or challenging, it’s always vital to make the most of whatever you have — and not, for example, let good income go to waste. There’s no point in being able to issue more invoices if they aren’t being paid.
Give me a call if you need help in getting slow-paying customers to pay you what they owe. After all, it’s only by being paid for what you do that you’ll be able to ride that wave of optimism through 2024.