Business surveys published this month suggest that one in two small business owners are feeling optimistic about their prospects in 2024, with many looking to grow.
A survey conducted by small business lender Iwoca has found that 47% of small business owners expect that their turnover will grow this year, a significant jump compared to just 26% at the start of 2023. Over a third (35%) think they personally will be better off at the end of the year, compared to just 16% at the start of 2023.
Despite this optimism, 43% of business leaders say they are pessimistic about the UK's economic future and 64% say the UK is losing its lead compared to other economies globally.
"After a tough year of high inflation for small businesses, it is fantastic to see optimism about growth return. Now that the economic environment is beginning to stabilise, SMEs can see the light at the end of the tunnel and increase their ambitions in 2024." Christoph Rieche, Iwoca ceo.
Small firms plan for growth in 2024
New research from Novuna Business Finance has found that 81% of small business owners are planning to develop their companies in 2024. With around nine in ten small businesses (89%) saying that they still feel the pressures from the cost-of-living crisis, there is an emphasis on increasing business income and sales this year across all sectors. According to the Novuna poll, the top five strategies that small business owners are focusing on are:
- Increasing new business income and sales (33%);
- Reducing fixed costs (20%);
- Diversifying the business, offering new products (18%);
- Planning ahead with business budgeting (18%);
- Building up financial reserves (17%).
Political indifference
However, the Iwoca poll has found that small business owners are largely indifferent when it comes to the looming general election. The findings show that 43% of SMEs think a potential change of government would neither harm nor benefit their business and 25% don't know how a change of government would affect them.
In fact, the survey results reveal that 35% of business owners think that none of the current leaders of UK political parties understand the needs of small businesses. Labour leader Keir Starmer narrowly beats prime minister Rishi Sunak, with 23% of businesses stating that he understands SMEs the most, compared to Sunak's 19%.
With increased business costs ranking as the top concern for enterprise in 2024, an energy price cap for businesses (32%) and tax cuts for SMEs (38%) top the list of policies small businesses want to see in election manifestos later this year.
SME employment trends
The latest data from the Office for National Statistics (ONS), released this week, suggests that the labour market is cooling, with wage growth slowing and vacancies falling. However, the Iwoca survey has found that one in four SME owners expects to increase their headcount this year, up from 6% last year.
Many employees are also keen to find new jobs, it seems. The latest Candidate Sentiment Survey by recruitment firm Robert Half has found that 40% of staff plan to change jobs this year, with one in six already on the hunt for work. The findings indicate that salary is a key driver, with 45% moving companies for better pay. Those aged 18-34 are more likely to change jobs than any other age group (56%).
Written by Rachel Miller.
