New research amongst the UK’s small and medium businesses, finds renewed levels of confidence and a return to optimism, along with clear indications that SMEs looked closer to home for the support they’ve needed to survive during the pandemic and unlock the recovery.
The new research from leading same day delivery business CitySprint, found that SMEs’ confidence and financial health are back on the up, with 72% of those who were at their business 12 months ago the same or more confident about the future of their company compared to 12 months ago. Of these, 46% stated they are more confident today than this time last year.
The survey of decision-makers and leaders at UK SMEs also reveals that they turned to local partners and suppliers for the help and support they needed over the challenging recent months. Over the last year, 64% of those who were at their business 12 months ago say they looked more locally for their business needs, compared to the year before. Meanwhile, 45%* say the significance of their collaboration with other local businesses has increased while 82% believe local support will benefit their business over the next 12 months.
There are also clear signs that these tactics paid off: the research shows that SMEs who looked locally for business needs were in better shape today financially and are more confident about the year ahead*.
Nonetheless, on average, UK SMEs say they have lost out on around £1million each in lost revenue or turnover over the last 12 months — a figure that rises to £1.8million for those with 100-249 employees*. Multiplying these average figures by the number of SMEs in the UKequates to £5.9trillion in lost income; a staggering hit to the UK economy.
Rosie Bailey, Commercial Director at CitySprint, commented: “With confidence and optimism returning, and signs of the recovery on the horizon, businesses are clearly feeling more upbeat about the year ahead. But this is thanks in no small part to the support from local partners, suppliers and customers they have partnered with over the last 12 months. This local-level support has clearly been critical to helping them navigate the challenges and hurdles of recent months. Long may this local collaboration continue.”
To grow their business over the next 12 months, SMEs in our survey say they would most benefit from further local Government support (29%) in the form of grants or advice and the good quality of local suppliers (21%).
The combination of Brexit and Covid have also thrown a sharp spotlight on supply chains, with 36% saying logistics and / or their supply chain have become more important to their business over the last year. This is especially pertinent given that more than half (59%) say their supply chain extends internationally, with just under half (49%) saying this includes Europe.
92% of respondents said they are taking steps to manage their supply chain in light of Brexit, with a third (33%) of those whose supply chain extends into Europe upping the communication they offer customers around the potential impact of Brexit.
Despite the renewed optimism, conditions remain challenging for the UK’s smaller enterprises; 94% in our survey see some significant obstacles for the twelve months ahead, with Covid (42%), Brexit (24%) and lower customer demand (23%) landing top of the list.