New report highlights how small businesses are demonstrating economic resilience
The country’s small business owners have shown their resilience over the past few years and have continued to trade through challenge after challenge being presented to them. According to government data in 2022, there are 5.5m private businesses in the UK and 99.2% of these are small or medium, employing fewer than 250 people.
This equates to 16.4m employees or 61% of the UK’s total number of employees. Combined, small businesses have turnover of £2.1 trillion, which is 51% of all the country’s private sector turnover.
In every local town across the UK, small businesses are the lifeblood of every community, providing employment, revenue and pride. However, between 2021 and 2022, the number of private sector businesses declined in six of the nine English regions. The largest decreases were in Yorkshire and the Humber (7%) and the East of England (4%) and the largest increase was in the South West (3%). There was a 1% decrease in Scotland, but a 5% increase in Wales and a 4% increase in Northern Ireland.
We know it takes a long time to ultimately enter the legal status of an insolvency process. The crisis may well have started months and even years before the final demise of a company. This month there may be many more businesses who are currently struggling, and others who will be affected, but they don’t even recognise it yet.
To protect the employment in our country and the livelihoods of many millions of people, we need to ensure that businesses survive past the economic turbulence and continue to operate in our local communities.
Paul Surtees, CEO and Co-Founder of Capitalise, sets out the reality: ‘The days of cheap goods, cheap energy and cheap money are over. Businesses which accept that and adapt to this new world will ultimately prove successful.’
In fact, research has shown that there have been many resilient businesses that have succeeded and thrived in previous economic recessions. They were found to face the challenges in front of them and adapt their business strategy to increase their profitability and market share.
Glenn Collins, head of policy, technical and strategic engagement at ACCA, says: ‘When you look at the work that accountants and advisers do, a lot of that is working through the options that will allow businesses to survive and prosper on the cash it’s got coming through. This is about providing the appropriate service, tailoring to a particular business need and enabling them to plan, recover and grow.’
In this guide we aim to support business owners and their advisers to do just this. We delve into what current challenges are being faced, how you can spot risks ahead and offer some tips to help guard a business from them. Read this new guide now.