SMEs continue to experience business growth and remain optimistic about future prospects
Key findings for business growth in 2017:
Almost half of respondents reported business growth over the past 12 months. After a successful 2011, in which 73% of respondents reported business growth, 2013 saw this number drop to just 42%. Since then, around half of respondents have reported business growth each year.
73% of respondents expect to see growth over the next 12 months. This reflects an overall increase in optimism not seen since 2012 when 77% expected to see growth. By contrast, this fell to just 64% of respondents expected growth in 2013 , with this number rising to 69% in 2016.
Cost-cutting alone will not achieve a sustainable business. Growth is a must on the business plan agenda. There is only so much cost-cutting that can be done before it actually starts to harm the business by removing resources necessary to take the business forward.
Getting more business from current customers is the most popular way companies intend to grow their business. Organisations also intend to rely on marketing and advertising, or create new products or services. As in 2016, this is likely a priority as companies look to overcome the skills gap which remains a significant barrier to growth, along with finding time to spend on managing the business.
If a business intends to place reliance on marketing and gain more revenue from their existing customers, businesses need to ensure they continue to remain relevant to their customer base. Often businesses can get blasé and take for granted just what it is their customers are looking for. So what was a loyal customer can easily turn into a former customer if service levels drop and product innovation falls away. Business owners should consider finding ways of finding out what their customers want as opposed to promoting to them what the business thinks their customers need.
72% plan to fund their business through cash flow. This is in on the back of bank debt having increased again, with 35% of businesses funding operations through debt this year compared with 29% in 2016. The family as a source of capital has risen significantly, with family loans increasing from eight% last year to 14% in 2017.