A significant majority of UK SMEs express concerns over the upcoming Budget, foreseeing impacts on growth strategies.
- 74% of SMEs anticipate the upcoming Budget will influence their future growth plans, according to Simply Asset Finance’s study.
- 31% of businesses predict a significant impact, and 13% consider it fundamental to their operations.
- The economic climate has already led to price increases and shifts in work practices among SMEs.
- Government action on key issues is eagerly anticipated by the business community.
The research conducted by Simply Asset Finance reveals that a substantial 74% of small to medium-sized enterprises (SMEs) in the United Kingdom believe that the forthcoming Budget will impact their growth plans. Within this overarching concern, nearly a third of businesses, specifically 31%, foresee a significant impact, while 13% rate it as fundamental to their business strategies. Conversely, only 15% of SMEs expect their growth plans to remain unaffected.
Compounding these concerns, the present economic conditions have driven 30% of SMEs to raise their prices, and an equal 16% have either switched to fully remote working or outsourced more business services. Additionally, the challenging financial landscape has caused 16% of businesses to pause or reduce their investments in innovation.
A panorama of challenges confronts SMEs in the current economic climate. Almost half, at 49%, are troubled by a stagnant economy, while 37% are apprehensive about high inflation rates, and 35% express unease over high interest rates affecting costs and credit availability. Despite these issues, a note of optimism remains, with 42% feeling positive about the coming year. Within this optimistic group, 30% believe the year will be considerably favourable, and 12% are genuinely enthusiastic about potential growth.
Varied investment intentions are noted among SMEs, as only 25% plan to borrow to invest in technological advancements, and a similar 19% aim to leverage borrowing for market expansion. Workforce growth and infrastructure upgrades are a priority for 17%, while 15% intend to invest in machinery. However, only 11% of SMEs are looking to external financing specifically for research and development innovation.
A mixed response emerged regarding government support, with 40% of businesses finding governmental efforts underwhelming, whereas 31% expressed satisfaction. SMEs have outlined several critical areas for government action in the impending Budget, including assistance with high energy costs, which is crucial for 33% of businesses. Other pressing areas include reducing regulatory burdens (28%), providing more tax incentives for innovation (27%), strengthening EU ties (24%), and ensuring government-backed loans for smaller enterprises (24%). Additionally, 20% of SMEs highlight the need for improved transport infrastructure.
In his comment, CEO Mike Randall of Simply Asset Finance underscored the lack of confidence in the government from UK businesses concerning the new Budget. According to Randall, the Budget presents an opportunity to directly address these issues, enabling businesses to seize a promising 12-month period for growth. He stresses the need for the government to listen to businesses’ demands and act to support them, particularly by addressing high energy costs, reducing regulatory complexities, and offering tax incentives for innovation, as these measures are vital for empowering SMEs to innovate, grow, and compete on various levels.
The upcoming Budget is a pivotal opportunity for the UK government to support SMEs in fostering growth and innovation amidst economic challenges.
