We are at a critical moment when it comes to supporting the small business community and their crucial contribution to the economy at large. Over the last three quarters, our Business Barometer study has seen small business confidence rise and stabilise, which is an important step forward. Looking ahead, these ventures also have clear ideas on what they need to rebuild and grow and all of these key areas – hiring people, diversifying services and marketing to new audiences – happen to also be same areas where small businesses say they cannot move forward without securing finance.
Job creation emerged as the most pressing issue where finance was needed - the new study reveals that for 30% of small businesses, plans to invest in job creation for skilled labour is dependent on the enterprise securing finance first. This pressure was most pronounced in the manufacturing sector (51%) and IT/ telecoms (34%). Regionally, small businesses in London were most likely to say they would need to secure funding before they could move forward with hiring plans (41%).
Our quarterly poll of 1,211 small business owners also revealed that 25% of enterprises would struggle to launch new products and services without first securing finance. This comes at a time when many enterprises big and small have had to look for new ways to rebuild and recover and for many this has involved diversifying services and product lines.
The Barometer results highlight the important role finance plays in helping small businesses to reach new customers. More than one in five small businesses (24%) said that without access to finance they would not be able to move forward with new marketing and advertising campaigns. Furthermore, almost a third of small businesses (31%) who have said they already have a broad-based international offering across many countries (including and beyond the EU) said advertorial and marketing would be impossible without securing finance (compared to 22% of business with only UK based customers).
Top 10 areas where small businesses need funding in order to grow
Increase headcount/ hire new people
Launch new products/ services
Run a marketing/ advertising campaign
Invest in new vehicles
Move to a better location/ bigger space
Modernise IT capability/ purchase new IT equipment
Pitch for major accounts/ compete with larger competitors
Invest in new production lines/ machinery
Launch into new market segments within the UK