After a challenging 12-months, small businesses resilience has not wavered as we start a New Year. Nationally, 83% of small firms say they have a fresh set of goals in place to secure the growth for the year ahead, according to new Business Barometer research from Hitachi Capital Business Finance.
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At a time when the UK has been plunged into a third national lockdown, Hitachi Capital Business Finance asked a nationally representative sample of 1,107 small business owners what they will be prioritising to make their businesses stronger in 2021.
The study found that while intent to secure growth is consistent with levels recorded 12-months ago, plans on how to achieve it have changed. For 2021, small businesses have prioritised plans to focus on their finances and save money in order to reduce the impact of continued uncertainty. Almost a third of survey respondents (31%) said they were planning to strengthen their business by keeping fixed costs down compared to 26% in January 2020. Further, more than a quarter of small business owners (26%) said they were working to build up their financial reserves.
In addition to saving money, January 2021 saw a rise in the proportion of small businesses that were actively putting in place contingency plans in the event of prolonged market volatility (rising from 15% in 2020 to 21% in January 2021).
The research found that small businesses that predicted growth in the next three months were twice as likely to be hiring younger people to train and develop (21%) rather than hiring senior-level, expensive talent (13%). These businesses were also the most likely (20%) to be streamlining and reducing costs by spending time investing in the people who already worked for the company.
The most adaptable sectors for the start of 2021 were manufacturing and retail. In the manufacturing sector, small business owners were most likely (45%) to be focusing on increasing new business income and sales in order to grow. In retail, small businesses were most likely to say they were doing what they could to diversify the business and offer new lines of services (36%).
Joanna Morris, Head of Marketing & Insight, Hitachi Capital Business Finance commented: “After a challenging 2020 which proved to be one of the most unprecedented years in living memory, it is positive that so many UK small businesses have started 2021 with new resolutions to protect and grow their enterprises for the year ahead. Cashflow and cost control are an immediate focus area for many and given the uncertainty of another national lockdown, this is a sensible foundation on which to maximise financial strength.
At Hitachi Capital Business Finance we have remained open for business throughout the periods of lockdown and social restrictions. We have a range of finance solutions to help businesses grow and we are committed to helping small businesses to fulfil their potential and get through the challenges we all face together in the coming months.”
The research was conducted by YouGov among a representative sample of 1,107 small business decision makers spanning industry sectors.