ARCHIVE FOR THE ‘small-medium-businesses’ CATEGORY

Despite lingering anxieties about the pandemic and a variety of economic and commercial issues, the majority of SMEs believe it is now imperative to begin building back from the crisis.

They are ready to step up their business investment, with ambitious plans for recruitment, renewal of equipment and machinery, and both domestic and international expansion. Fintech business lender MarketFinance asked 2,000 SME owners across the UK about their outlook for 2022 and beyond, gauging their short and long-term plans for business investment and growth. MarketFinance has today released a comprehensive research report of its findings, which are summarised here.

Confidence 

Analysis of the survey results has shown that business confidence amongst SMEs is improving, with many firms now focused on recovery and growth. With pandemic disruptions now largely settled, half of SMEs (48%) expect their turnover to stabilise or to increase over the next 12 months. Similarly, 50% of SMEs expect demand for their products or services to stabilise or to increase over the next six months. MarketFinance’s research has found that the majority of SMEs (63%) expect their business to grow over the next three years

Investment 

With survival mode no longer a necessity and cash flow pressures beginning to ease, the vast majority of SMEs (70%) now feel confident enough to increase business investment over the next 12 months. A quarter of SMEs plan to hire new staff, while 24% expect to purchase new equipment and machinery. When asked how they were factoring borrowing into their investment plans, 23% of SMEs said access to a broader range of borrowing options could enable them to increase investment even further.

Borrowing 

The research findings demonstrate that borrowing will play a key role in recovery and growth with 62% of SMEs saying that prudent borrowing could help them fund growth. However, three quarters (71%) of SMEs do not believe traditional banking products are the most obvious and convenient way to borrow for investment. Despite this lack of alignment between current finance needs and the options available through traditional routes, more than a third of SMEs (37%) are looking to take on new borrowing facilities.

Growth

With confidence high and a sense of having moved beyond recovery and into a new stage of growth, many businesses are looking forward to seizing a host of opportunities in 2022. Almost all SMEs surveyed (81%) plan to invest in sustainability, while 30% say they are considering merger and acquisition (M&A) activity in the year ahead  – more than twice as many as those primarily focusing on organic growth (14%). Over a third of businesses (34%) say they already sell overseas, or have plans to begin doing so. That figure is highest amongst the largest businesses surveyed (turnover between £5m and £6.5m) but even amongst smaller enterprises significant numbers are focused on export.

Anil Stocker, CEO at MarketFinance, commented: “It’s clear that the business environment has shifted and SMEs are looking ahead with a quietly confident and cautiously optimistic view. UK businesses intend to ramp up growth through domestic and international expansion, digital transformation and even M&A activity. But as they reset their post-pandemic goals for a post-pandemic, they’ll need to be confident of their funding base. 

Given that so many SMEs are looking outside of traditional routes in their search for finance, we’re particularly proud to have been accredited by the British Business Bank as one of the few alternative providers under The Recovery Loan Scheme. Schemes like the RLS are a golden opportunity for SMEs looking to gear up for growth, providing easily accessible funding at a lower cost across a wide range of products. We expect to see a large number of SMEs taking advantage of the scheme over the next 6 months as their growth and expansion efforts gain momentum and they invest in ambitious plans for 2022 and beyond.” 

Further Reading:

• Read more about Leadership and Strategy @ www.fieldservicenews.com/leadership-and-strategy
• Read more about the impact of COVID-19 @ www.fieldservicenews.com/COVID-19
• Read more about Fintech on Field Service News @
• Learn more about Market Finance @ marketfinance.com
• Follow Market Finance on Twitter @ twitter.com/marketfinance

More than half (57%) of SME owners plan to expand trade to new territories outside the EU and at home after the pandemic with the help of online tools, according to global small business platform, Xero.

The boom in e-commerce and new EU trading conditions are driving many SMEs to break into fresh territories and customer segments. According to Xero’s Future of Small Business report, more than a third (36%) say it’s too expensive to sell to European countries, due to Brexit trading regulations and import-export charges.

This hasn’t dampened small business ambitions. It’s pushed 44% to explore new markets for the first time, with one third (33 per cent) increasing their customer base geographically during the pandemic due to a bigger focus on borderless e-commerce sales.

A THIRD OF SMALL BUSINESSES INCREASED THEIR CUSTOMER BASE GEOGRAPHICALLY DURING THE PANDEMIC DUE TO A FOCUS ON BORDERLESS E-COMMERCE SALES, AS COMPANIES QUICKLY ADAPTED AND EMBRACED NEW TECHNOLOGIES

The rise in remote working and rapid adoption of new technology has made it much easier to sell beyond physical location. 2 in 5 (41 per cent) say that online tools have been key for targeting new customers both at home and abroad. And 34% of SME owners are now more willing to hire staff that are completely remote as a result of Covid.

“The way small businesses operate on a global scale is transforming and it’s positive to see the impact of Covid and Brexit hasn’t dampened their ambitions. Technology and automated software in particular – like e-commerce platforms – have undoubtedly opened up trade opportunities for small businesses, allowing them to trade both across the UK and further afield,” said Donna Torres, director of small business at Xero.

Max Henderson, Co-Founder of Hotpod Yoga, also commented: “Dealing simultaneously with a global health pandemic and Brexit, has certainly been challenging. Luckily for us, the reaction in the UK since lockdown restrictions eased has been extraordinary and we’re seeing our classes hit 100% capacity across the whole country. 

“This kind of rebound has meant we're back on the front foot and looking to launch around 40 new locations across the UK and Europe within 12 months - but with that comes a lot of work to understand the rules of operating in different markets and of course a large amount of paperwork for things like customs and rules of origin.  We’re yet to see the immediate effects of Brexit on trading, with cross-continental trade having been put on hold due to various lockdown restrictions in each market, but given our success in the UK, we’re optimistic about the opportunity.”

Thea Paraskevaides, Founder of Beaumont Music, explained her situation: “Due to Brexit we've had to register for VAT in six countries which we were already distributing to. The amount of paperwork this has come with is overwhelming but using digital software like Xero has made the process far more streamlined.”

Xero has a dedicated Brexit Hub - here - with advice and resources to help businesses stay up to date.

Research methodology

The survey was conducted in January and February 2021 by Censuswide with 500 SME owners and 2,000 consumers.

Further Reading:

• Read more about Leadership and Strategy @ www.fieldservicenews.com/leadership-and-strategy
• Read more about the impact of COVID-19 in the Field Service Industry @ www.fieldservicenews.com/COVID-19
• Learn more about Xero @ www.xero.com/uk/
• Follow Xero on Twitter @ twitter.com/xero/

Kris Oldland, Editor-in-Chief, Field Service News talks to Pål Rodseth, CEO of Asolvi about how he has brought together three key companies serving the SMB field servicer market across Europe, the meaning behind the new brand name Asolvi, how their customers are benefiting from the collectively shared learnings of a wider pool of peers and what the future holds for Asolvi.

Be social and share