Most SMEs in Cardiff are optimistic about the year ahead, a new survey suggests.
A report from fintech SumUp said that almost two in five (38%) of respondents said they are feeling confident about their business, expecting to overcome challenges, with 18% saying that they are very confident about their business and expect to experience significant growth over the next year.
A fifth (20%) of those participating in the survey said they felt uncertain and expect their business to neither grow or decline significantly over the next year. Additionally, 11% of respondents said that they have some concerns over current challenges, however generally have a positive outlook about the future of their business.
Only 13% of small business owners and decision makers said that they are worried about the future of their business and expect there to be many obstacles to tackle.
Small business owners and decision makers in Cardiff were asked what the main factors are that are currently impacting their business confidence.
Almost two fifths (38%) said that the economy and inflation rates in regards to raw materials and stock is the main challenge that they are facing and impacting their business confidence the most. Similarly, 29% said that the cost of bills and necessary investments such as energy, rent, and new machinery is a cause for concern.
Furthermore, a third (33%) said that they are struggling with customer retention. Other challenges that SMEs are facing include staying on top of competition (24%), smaller profit margins (22%), and competitors offering cheaper alternatives (18%).
Only 11% of respondents said that they are not experiencing any challenges in regards to their business.
SMEs are making a number of changes in order to stay on top of challenge. One in three (30%) have worked on a cost-saving plan in regard to supply chain and professional services to help alleviate financial pressures, whilst 17.5% have worked on cost-saving plans that include a change of service providers such as energy, gas, and Wi-Fi.
Furthermore, a fifth (20%) have lowered their pricing structure in a bid to help customer retention, while on the other hand 17.5% have increased their prices to protect their profit margins.
Some of the other changes SMEs are making include expanding their product or service offering to expand into new markets and reach new consumer groups (12.5%), reworking their business so that it is more eco-friendly, resulting in lower energy costs (12.5%), and laid off staff to lower the cost of employees (5%).
A fifth (20%) of respondents said that they have taken no action to tackle current challenges.
Corin Camenisch, Product Marketing Lead at SumUp commented on the survey:
“As champions for small merchants, we conducted this survey to discover the confidence levels of small business owners and decision makers in the UK to better understand the challenges they face, gauge their optimism about their future, and identify areas where support for SMEs might be needed.
“Overall, confidence levels of small business owners and decision makers across the UK are high. This positive outlook suggests that small merchants are prepared to navigate potential uncertainties and continue to thrive.”
