Business
UK Small Businesses Focus on Growth as Optimism Reaches Two-Year High
More than 80% of small businesses in the UK are planning growth-focused initiatives for 2025, according to a new study by Novuna Business Finance. The findings reflect increased optimism among UK enterprises, with a two-year high in growth projections reported.
Key priorities for businesses include boosting new sales, with 43% of firms aiming to increase revenue, while 24% are focusing on reducing fixed costs. Additionally, one in five small businesses is prioritizing the diversification of their business models and the development of new products or services.
However, despite these growth ambitions, recent changes to National Insurance appear to have dampened hiring plans. Only 7% of SMEs are focusing on hiring senior staff, and just 9% plan to recruit young talent in the coming year.
Regionally, businesses in London are leading the charge, with 94% of firms in the capital prioritizing growth initiatives. This is followed by the West Midlands and North East, where 83% of businesses are similarly focused on expansion. Sectors such as media (92%) and manufacturing (90%) are among the most likely to drive growth in 2025, suggesting strong momentum in these industries.
The optimism is further evidenced by the fact that 35% of small businesses reported growth in the past three months, the highest figure in two years. Despite concerns over the Autumn Budget and ongoing economic uncertainty, many SMEs are ending 2024 on a high note.
Joanna Morris, Head of Insight at Novuna Business Finance, commented on the findings, saying, “The percentage of enterprises predicting growth has been at a two-year peak since July. A significant proportion are already prioritizing growth projects for the year ahead. We are committed to helping businesses realize their potential and build on the resurgent confidence seen this year.”
While growth remains the top priority, financial prudence is also a key theme. Many small businesses are working to manage fixed costs and build financial reserves, ensuring they remain resilient in a rapidly changing economic environment.
The study underscores the determination of UK small businesses to drive forward and position themselves for sustained success in 2025 and beyond, even in the face of challenges.
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