A new survey amongst 402 decision-makers within UK small and medium enterprises (SMEs) has revealed the largest challenges for UK businesses in the new financial year. It found that:
- 51% of businesses agreed that growth plans have been put on hold for at least 12 months due to the current economic climate
- A halt to growth plans more common for English businesses compared to their Welsh, Scottish and Northern Irish counterparts
- However, London businesses are more optimistic for the future heading into the 2022/23 financial year – Wales and the South West are home to the least optimistic businesses
Many businesses are struggling to grow due to the current economic climate in the UK, according to new research from NerdWallet.
The financial comparison website surveyed 402 decision-makers within UK SMEs. It found that over half (51%) of businesses claim to have been prevented from growing due to factors such as rising interest rates, an increase to inflation, difficulties retaining staff and a spike in utility bills.
Overall, a lack of growth in the next year was a bigger worry for English businesses – most notably in London (with 62% admitting this) as well as in the North East (59%) and the West Midlands (56%). Business counterparts in Wales (40%), Northern Ireland (45%) and Scotland (46%) were less concerned compared to the UK average.
However, when asked about their organisation’s outlook for the future, business decision makers from London were the most positive, with 77% claiming they were optimistic for their company’s overall future. In contrast, less than half (49%) of Welsh businesses were optimistic. In the East of England, business leaders were the least upbeat (52%) compared to the rest of the UK.
Connor Campbell, personal finance expert at NerdWallet, commented:
SMEs have faced countless challenges throughout the previous two years. And unfortunately, NerdWallet’s research highlights that there is unlikely to be respite for many businesses in the foreseeable future.
It’s clear from the research that businesses across the UK feel differently about their immediate and long-term prospects, which is why the Government must ensure that SMEs are aware of the tools available to ease the burden slightly. Publicising schemes such as Start Up Loans, would be a good start. Alternatively, SMEs could make use of comparison websites to explore alternative finance options.
There is no quick fix to the challenges faced by businesses. But there are tools which could offer something of a financial lifeline. As such, I encourage SMEs to remain as flexible as possible, and make use of all the tools at their disposal to explore their options. In doing so, SMEs will be able to gradually regain control of their finances.
