Business confidence is a funny thing. The news can be full of doom and gloom and yet many small business owners manage to remain resolutely positive. Certainly, when we polled small firms last Spring, there was a good deal of optimism, with 48% saying they expected 2012 to be better than 2011.
What a difference a year makes. Now, it seems, business owners are considerably gloomier. Our February 2013 small business survey, sponsored by Sage, found that just 34% of business people are optimistic about the year ahead.
And it seems this dramatic drop in confidence is having some knock-on effects. 6% of respondents say they plan to make redundancies — double the 3% who said the same in 2012.
In addition, 22% are unsure about the prospect of redundancies, significantly more than the 10% who said they were unsure about laying off staff this time last year.
It looks as though many are putting growth plans on hold as they adjust to what some are calling “the new normal” — economic stagnation. For instance, just 32% told us they planned to spend more on marketing — a big drop from the 51% that were planning to invest more in marketing in 2012.
Most small firms say that Government support is not sufficient — a total of 72% of respondents told us that the Government will either not do enough or not do anything to support businesses in 2013. Mind you, last year that figure was 73%, so there’s little change there.
What has clearly changed is business optimism.
SME owners are the backbone of the British economy, making up 99.9% of all UK private sector businesses and contributing 48.8% of private sector turnover (according to the FSB).
Small business owners have done everything within their power to ride out this storm — from painful belt-tightening to finding new gaps in their markets and opportunities to grow. But it has been a long haul and there’s a sense that they are growing weary.
It’s important not to give up now. We recently published James Hay’s blog, Keep swimming, on Marketing Donut, extolling the business benefits of simply keeping going. It clearly struck a chord.
The relentless bad news can be hard to ignore but small firms need to stay positive if they are to survive and thrive. Let’s hope that in confidence terms — as well as economically — we have already hit bottom.
Rachel Miller is the editor of Marketing Donut.
Those who completed the survey were automatically entered into a draw, with a spanking new iPad mini available as a prize. The winner was Jackie Beard, owner of Gloucestershire-based florist and flower arranging business Jessabel Flowers. Many thanks to sponsors Sage, as well as Jackie and everyone else who took the time to complete the survey.