New research has found that UK small businesses are now more optimistic than they were before the coronavirus pandemic.
As lockdown restrictions continue to ease across the UK, research from Barclaycard Payments has found that small businesses are predicting a 9.8% rise in revenue this quarter compared to Q1 2021.
The survey, which polled over 670 senior staff working in UK SMEs, shows that business sentiment is starting to look more positive, at 110 points out of a possible 200. This is up from a low of 79 points in Q2 2020, and means that small firms are back to the same pre-pandemic sentiment levels last seen in February 2020.
Another positive indicator is that 85% of small businesses say they are planning to invest over the next 12 months - in people, new equipment or technology and by ramping up their marketing. Almost half (47%) say they expect to increase their staff over the next year.
The rise in optimism is especially high in hospitality and leisure as businesses reopen after the long third lockdown. The findings show that hospitality and leisure SMEs anticipate revenue rises of 21% as restrictions continue to be eased. Looking ahead, small firms are forecasting an 18% increase in revenues a year from now, with the hospitality and leisure sector expecting a 42% boost. Many SMEs have an optimistic (33%) or neutral (40%) outlook for the UK economy; but that increases to 51% optimistic and 36% neutral about the prospects for their own businesses.
Despite signs of optimism, potential challenges remain for the coming months:
- 37% of businesses polled expect customers to hold back their spending until 21 June;
- 33% worry that people now prefer to socialise and eat at home;
- 34% are concerned that customers will tire of social distancing measures.
Even so, the results of the poll show that hospitality and leisure SMEs are prepared for returning customers, with the majority having invested in hand sanitiser, signs to remind customers about social distancing rules and PPE for staff. They are also looking at ways to boost revenues including increasing prices (21%) and improving outdoor spaces (16%).
Rob Cameron, ceo of Barclaycard Payments, said: "With the confidence to plan ahead, small businesses have turned their attention to bulking up their workforce, as well as investing in technology and marketing. We're looking forward to seeing this confidence translate into sales."
Written by Rachel Miller.