2014 will arguably be the year of the comeback for Britain's small and medium-sized enterprises (SMEs). Various reports and studies show significantly increased positivity amongst such organisations. Combined with enhanced support from the government, all the signs point to growth. So why exactly will this year be a bountiful one for SMEs?
More staff equals more power
One-third of the UK's SMEs intend to grow their workforce this year, according to research undertaken by Clydesdale and Yorkshire Banks. In fact, Britain's 4.9 million SMEs say they'll recruit 2.9 per cent more staff; potentially equating to over 415,000 new jobs. What's more, just under one-quarter of SMEs expect to invest 'additional' money in new staff members, demonstrating their dedication to staff retention, too. Only two per cent say they intend to reduce their workforce, showing that the majority feel good about the future.
The benefits of a larger workforce are obvious - more staff equals more productivity. More productivity could equal more money... But it also means greater power, strengthening SMEs' position within the marketplace and allowing them to compete on a wider level. "Increasing staff numbers can help businesses... [and] allow expansion into new markets as capacity grows," claims Paul Shephard, Clydesdale and Yorkshire Banks' director for business and private banking.
Greater access to export agreements
As their workforces grow, SMEs will see their access to overseas export agreements broaden too - thanks to a pledge by the government to help smaller businesses secure more overseas contracts. The government's dedicated department for this, UK Trade & Investment (UKTI), aims to help Britain's top 100 'creative sector' SMEs pin down £500 million worth of 'high-value' overseas deals by 2017.
This forms part of a wider plan to help 100,000 more small or medium-sized businesses start exporting their goods or services into the global market. All in all, this is support that will likely be welcomed by SMEs throughout the nation and demonstrates the government's commitment to making life easier for our small businesses. It's a wise move, too, considering SMEs make up 99.9 per cent of all UK-based private sector companies.
Raising finance is easier than ever
Thanks to increased government support and greater awareness of how to crowd-fund, raising finance seems to be easier than it ever has been for the UK's SMEs. A survey of over 225 SMEs, carried out by Monahans and MHA (the UK association of accountancy and business advisory firms), shows that the majority find raising money simple.
Over half of respondents said they find raising collateral 'very easy', 'easy' or 'average'. One-third make decisions based on advice from their accountants, whilst 29 per cent have sought help in raising money from their banks. This heightened access to funding seems to have increased confidence no end, with 40 per cent of respondents expecting their business to grow by at least ten per cent this year.
Overall, things seem to be on the up for SMEs. With greater hiring intentions, improved access to funding and the support required to break international markets all in place, the outlook is bright. What's more, as technology continues to evolve and bring-your-own-device (BYOD) initiatives allow employees to work more flexibly than ever before, productivity could go through the roof this year. The opportunities are clearly there - it's just up to Britain's SMEs to take the bull by the horns.