Small companies cite boundaries to development as fears over market uncertainty rises sharply

The final 12 months has seen an increase within the variety of small enterprise homeowners that say their enterprise is being adversely affected by ongoing market uncertainty and rising overheads – in line with the most recent small enterprise development analysis from Novuna Enterprise Finance.

With the proportion of small companies predicting development remaining static at round 33% for the third consecutive quarter, the brand new Novuna examine of 1,088 small enterprise homeowners highlights the vary of challenges that small companies are going through as a way to keep afloat. Total, eight in ten small enterprise homeowners (80%) cited market elements that had been holding again their enterprises this spring.

The brand new Novuna Enterprise Finance knowledge reveals that considerations over financial market uncertainty have risen sharply from 36% to 45% in 12-months. On account of these considerations, 22% of enterprise homeowners declare to be unsure about the way forward for their enterprise (an increase from 16% to 22% since June 2022).

While the disruptive affect of Covid on companies is receding (down from 14% to 12%), the long-term affect of Brexit continues to be a problem for a lot of small companies – unchanged from this time final 12 months at 24% – and considerations over purple tape have elevated from 15% to 22%.

day-to-day enterprise operations, there was additionally an increase within the proportion of small enterprise homeowners that stated rising fastened prices and overheads had been holding their enterprise again (up from 18% to 27% in 12-months). There was additionally a slight improve within the variety of companies that talked about the rising price of expert labour as an element that was holding their enterprise again (up from 16% to 18%).

By sector, small companies within the hospitality (92%), retail (87%) and building sectors (85%) had been most probably to quote market elements that had been holding their enterprises again from rising – and seasonal companies had been extra prone to understand boundaries to development in comparison with enterprises that didn’t expertise seasonal summer time peaks (93% Vs 73%).

Rising fastened prices and overheads had been the largest challenges within the hospitality sector (60%), the legacy of Brexit was most strongly felt in manufacturing (40%) – while small companies within the building sector had been most probably to be adversely impacted by expert labour shortages (33%).

Jo Morris, Head of Perception at Novuna Enterprise Finance stated, “While 2022 might have a been a 12 months when small companies needed to react to numerous financial shockwaves – rising vitality prices, provide chain disruption, labour shortages and rate of interest hikes – 2023 is proving to be the 12 months when many enterprises are actually feeling the affect on their planning and backside line.

“Our newest analysis outlines that 4 in 5 companies cite market challenges which can be holding again their development plans and these points are actually different and multi-dimensional.

“Given the sheer variety of challenges confronted, it’s doubly spectacular that the proportion of small enterprise homeowners predicting development stays steady at round 33%.

“At Novuna Enterprise Finance, we’re dedicated to serving to small companies to fulfil their true potential via tailor-made merchandise and toolkits – to help their development ambitions in difficult occasions.”