96% of SMEs expecting growth despite double-dip

Almost half of small to mid-sized businesses in the UK are expecting to grow by more than ten per cent, the ‘Thinking Bigger’ report by SAP Limited indicated.

Ambition and confidence amongst Britain’s businesses is much higher than the grim economic outlook implies. 96 per cent of SMEs are expecting to grow, according to the report. ‘Thinking Bigger’, released today, depicts a high level of optimism in the business community.

SMEs have adapted to the ‘new normal’ of our economic climate and are taking the challenges into their own hands, so John Antunes, director SME & Channels at SAP UKI, told Real Business.

“We’ve been in this economic climate since 2008, long enough to know that this is the new norm. SMEs are no longer waiting for the economy to recover, they know they have to drive this recovery themselves. That’s quite startling compared to late 2009, when the feedback we received from SMEs was very much that they were waiting for the economy to recover, in order to be a part of that recovery.”

Finance was seen as the biggest driver for growth by 62 per cent of SMEs, but also as the most problematic area. Some 44 per cent are reliant on credit from a third party bank or building society in order to operate, while 63 per cent hold an overdraft facility.

Innovation follows finance as second biggest growth driver. Britain’s SMEs see their in innovation not only in the areas of technology or process, but in their abilities to find different ways to market, different customer management, and different business models, driven by changing customer demands, cost reduction and the economic climate.

Although SAP did not differentiate its research in terms of business size, there are clear indications which industries have the most ambitious businesses. Companies in the IT & Telecoms and business services sectors are looking to grow faster than others, while the manufacturing industry is holding back the most.

“Businesses in IT & Telecoms are fairly buoyant, and business services is generally an industry that is agile in their approach, able to adjust its skillset and resources according to market needs,” explained John Antunes. “An industry like manufacturing is a lot more inert and can’t just reinvent itself over night.”

In addition to differences between sectors, the report found that SMEs fall into distinct camps when it comes to their approach to achieving growth: ‘accelerators’ who are more bullish, aiming to grow their business ahead of industry standards, and ‘stabilisers’ who are less ambitious and seek to grow in line with competitors.

“The interesting thing is that both groups collectively are looking to grow, despite the economic environment and the messaging in news and press. A shocking 96 per cent of respondents effectively said they’re planning to grow and that demonstrates a very positive mood across the UK.”

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