According to new research, 1.6 million small businesses report a doubling or halving of revenue in certain months of the year. Defined as a business with up to 250 employees, small-medium enterprises (SMEs) are imperative to the UK’s economy, with their input increasing yearly.
Amidst large instabilities in revenue in the UK which make business and cash flow management strenuous, small businesses emerge to be resilient. As evidenced in 2017, there were 381,885 small business ‘births’ in the UK, with 24% of them registered in London, which records the highest ratio of SMEs. Additionally, there has been a 23 per cent growth of VAT registered SMEs in the last five years, with 2.7 million now operating within the UK.
Due to rapid expansion, 23% of small businesses have had to employ more staff. In doing their part to create and provide jobs, SMEs have employed 60% of the working UK population. It is attributable to the broad services sector, which is by far the largest industry for SMEs in the UK, with services including legal, architectural and more.
In the past year, 53% of small to medium-sized enterprises (SMEs) reported an increase in revenue. Enhancing SMEs profitability and growth will have a ripple effect on the overall UK economy since SMEs comprise a large part of the economy.
Challenges facing SMEs
Although the general position is decent for small businesses, there are some indisputable challenges.
The biggest concern noted among SMEs in the UK is attracting customers. This itself is not an entirely new challenge for businesses, big or small, but the nature of attracting consumers has evolved with time. Adopting new avenues effectively, like understanding digital marketing, could help counter this.
Most UK SMEs cannot access funding which is vital for their growth. Despite government support in the form of grants, schemes and loans alongside alternative funding options like crowdfunding, it is still not sufficient. Failure by SMEs to apply for all the funding initiatives at their disposal is part of the problem.
Opportunities for growth
In spite of these challenges, SMEs are still steadily focused on growth. The current small business performance figures demonstrate there are plenty of opportunities for SMEs to grow in the UK.
Adoption of innovation and digital technologies integrated with knowledge can generate new products, services and business models for SMEs. Digital trends like eCommerce, the selling of goods and services online and Artificial Intelligence simulation of human thinking and reasoning, are some of the various digital avenues SMEs are exploring in a bid to see increased diffusion of digital technologies.
To encourage growth, small businesses should not draw back from seeking investment opportunities. Investing in product development, marketing and skilled staff are all essential elements of a small business’ achievement.
In summary, the UK small business population is steadily on the rise and things are getting better. However, more work should be done to help them thrive, let alone survive.
Mark Gray is a freelance graphic artist and content writer from Berkshire, UK. He enjoys travelling, attending tech conferences, surfing, and gaming. He is also a newbie in the small business world but has big dreams in store for him.