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January 11, 2013

A third of SMEs plan to diversify in 2013


Small firms are increasingly diversifying in order to survive and thrive, according to Aviva's bi-annual SME Pulse survey.

Nearly half (48%) of the business owners who set up shop in the past two years are looking to expand their business operations in 2013.

And 30% of respondents reveal that they have diversified their business in the past six months to maintain business profitability – almost twice the number who said the same this time one year ago. In addition, 23% are planning to continue diversifying in the first six months of 2013 to keep their businesses healthy.

Confidence about sales has risen significantly, according to the survey.

Twice as many SMEs (65%) expect average to strong sales in the first half of 2013, compared to just 32% in the same period last year. Firms with 11-25 employees are most optimistic, with 74% expecting average to strong sales in the first half of the year.

The survey, conducted online by Redshift Research on behalf of Aviva, involved 500 SME owners. It also found:

  • 42% of businesses have set themselves new goals and objectives at the start of 2013
  • 49% of SME owners felt they had met or achieved their goals last year
  • 37% are looking to grow their businesses, motivated by wanting to boost revenues (80%), to benefit from economies of scale (36%) and generally feeling that it is the right time to grow (27%)
  • 53% are happy with the current size of their business

David Bruce, commercial product manager at Aviva, said: "There is a growing focus and importance on the sector in driving economic recovery, and this optimism is further substantiated by the number of SMEs predicting ambitious growth plans for 2013. The size and nature of small to medium-sized businesses allow owners to be more flexible and nimble in responding to market conditions and to make those business decisions that can have a great impact on success."