Steve Tuitt, March 2019, ETR: 2 mins

UK SME – Business Operating Environment.

There are a lot of factors affecting the performance of small businesses across the UK. They are having to plan and implement solutions for challenges like Brexit planning. In this post we focus on the general trends in the operating environment.

Highlighted below are some key statistics from the 2018 Longitudinal Small Business Survey of UK SME employers (1-249 employees) which you may find interesting (to view full report click on this link – full report).

  • There has been a sharp increase in the proportion of SME employers aiming to grow their sales in the next three years, from 62% in 2017 to 71% in 2018.  This has been driven by the increased ambition of the smallest businesses.
  • For the first time since the credit crunch we have seen a drop in the proportion of SME employers who have made a profit in the last financial year, from 82% in 2017 to 76% in 2018.  Businesses in the health sector and ‘other services’ saw the greatest falls.
  • 23% of SME employers have done business with the public sector, a similar rate to that seen a couple of years ago, but there were big increases in this rate within the education sector (to 49%), transport (to 32%) and construction (to 31%).  The arts and entertainment sector saw a big drop from 19% to 8%.  The main public sector customers were local authorities and the NHS.
  • Businesses in the information and communication sector, in manufacturing (both 33%), education (29%) and professional and scientific sectors (28%) were the most likely to have innovated processes. Those in construction (12%), accommodation and food service and other services (both 15%) were the least likely to have innovated processes. See Figure 3.2 above.
  • An estimated 41% of SME employers had a business plan. Looking at micro businesses, 38% had one, compared with 56% of small businesses and 69% of medium-sized ones.
  • By sector, business plans were most common in health (69%), education (62%), finance and real estate, arts and entertainment (both 52%). They were least likely to be used in construction (31%), transport (32%), wholesale and retail (34%).
  • SME employers were most likely to mention competition in the market as a major obstacle to the success of their business (46% in 2018). Other major obstacles included regulations and red tape (43%), taxation (40%), staff recruitment and skills and late payment (both 33%), and UK exit from the EU (29%).
  • Larger SMEs were more likely to have sought external information or advice. This was sought by 40% of medium-sized businesses, compared with 31% of small businesses and 25% of micro businesses. The decline in the proportion using information or advice since 2017 is mainly driven by small and medium-sized businesses.
  • Of those that sought information or advice 34% said they had used information relating to the day-to-day running of the business, 24% had used strategic advice to help introduce a “step change” to grow their business in terms of profitability, numbers employed or productivity and 27% had done both of these.

Mr T says:

How could your business use this information to prepare for 2020 and beyond?

At SBTC we work with businesses who want to change the way they do things. If your business is transforming and needs support for the projects or initiatives?

Call or contact us for a free consultation.

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