Britain's entrepreneurs remain bullish

Aug 12 2005 by Brian Amble Print This Article

A quarter of Britain's small business owners intend to recruit additional staff and invest more during the next 12 months, underlining continuing optimism amongst the country's entrepreneurs in their own businesses.

The Bank of Scotland Business Banking's quarterly UK-wide small business economic confidence survey has found that more than eight out of 10 entrepreneurs believe the performance of their business will be better or stay the same in the next 12 months - a rise of 19 per cent since March.

But whilst almost six out of 10 small businesses remain confident in the UK economy, net optimism has fallen by 12 per cent since March.

Just over a third (36 per cent) of entrepreneurs also believe general economic conditions will be "worse" in the next 12 months.

There has also been a decrease in the number of businesses expecting to invest more in their business this year. Three out of 10 small businesses expect to increase investment over the next 12 months - a fall of 22 per cent since March.

While 14 per cent of small businesses plan to increase their investment by over 10 per cent in the next 12 months, conversely, 16 per cent plan to invest less.

Similarly, increasing staff numbers is part of the business plan for almost a quarter of small businesses over the next 12 months.

While this is a reduction of 21 per cent since March, a mere five per cent of entrepreneurs believe they will employ fewer staff in the next 12 months.

But despite growing optimism, entrepreneurs clearly feel they are having to work very hard to achieve their success.

An unprecedented number state that business life is getting tougher. Almost six out of 10 small businesses claim it has become more difficult to run their businesses over the last five years and more than a quarter said it had become much more difficult.

Other research has highlighted the negative impact of regulation and red tape on small business activity.

Earlier this year, the UK Business Barometer survey found that a quarter of businesses have purposely avoided expansion to avoid the impact of regulation, with almost all saying that their decision was because of the impact of employment legislation.

The 2005 Sage Heartbeat Survey also found that four out of 10 small business owners said they would be unlikely to set up in business if the opportunity arose again, with red tape and taxation emerging as their two biggest problems.

But Kevin Gillett, Head of Bank of Scotland Business Banking, remained positive about the prospects for Britain's small businesses.

"The overwhelming confidence amongst small business entrepreneurs in the future performance of their business is greatly encouraging," he said.

"Whilst a third of small businesses may be less confident about future general economic conditions, the fact that the engine room of the economy is still recruiting, investing and performing well paints a strong picture."