Running a small business in the UK is no easy task, however, the lingering effects of the recent recession are now starting to shrink and 2024 is seeing inflation drop to its lowest level in two years1.
With this in mind, SumUp surveyed 750* small UK business owners and decision makers within small UK businesses to see how confident they feel about the state of the current UK market, the challenges they are facing, and if their current confidence levels extend to future expectations.
Belfast SMEs confidence levels:
Overall, small business owners and decision makers in Belfast are optimistic about their future, especially as the UK economy recovers from the technical recession it entered in 2023.
A quarter (25%) of respondents said that they are confident about the next 12 months, expecting their business to perform well and overcome challenges. A further 17% said that they are very confident about the future, expecting their business to experience significant growth.
Furthermore, whilst 25% said that they feel uncertain about the future and neither expect their business to grow or decline significantly, an additional 25% said that they have some concerns over current challenges however, generally feel positive.
Only 8% of respondents said that they are worried about the future of their business and expect there to be a lot of challenges to overcome.
Challenges SMEs are facing:
Although SMEs in Belfast are optimistic about the future of their business, they did acknowledge the current challenges they are facing.
Over two-fifths (42%) said that the economy and current inflation rates are the main factors influencing their confidence levels. Similarly a third (33%) said that the cost of bills and necessary investments including energy, bills, and new machinery is their biggest challenge.
In terms of competition and customers, 67% have found it harder to retain customers as a third (33%) report that their competitors are offering cheaper alternatives to their product or service offerings. Furthermore, a quarter (25%) stated that it is tough trying to stay on top of competition.
Other challenges that small business owners and decision makers have identified include smaller profit margins (42%), customers making fewer purchases overall (25%), and digital transformation (8%).
How SMEs are tackling challenges:
It appears as though small business owners and decision makers are implementing a number of changes in order to tackle challenges.
A third (33%) of respondents said that they have worked on a cost-saving plan regarding a change of service providers for their energy, gas, and Wi-Fi. Similarly, 25% have worked on a cost-saving plan regarding their supply chain and professional services.
Over two-fifths (42%) have increased their prices in order to protect profit margins while on the other hand 17% have lowered prices in a bid to help customer retention. Furthermore, 17% have diversified their product range or service offering to expand into new markets and reach new consumer groups.
Other changes that SMEs have made include laying off staff to lower the cost of employees (17%), taken out a loan (8%), and investing in digital transformation to support and grow their business (8%).
Corin Camenisch, Product Marketing Lead at SumUp commented on the survey: “As champions for small merchants, we conducted this survey to discover the confidence levels of small business owners and decision makers in the UK to better understand the challenges they face, gauge their optimism about their future, and identify areas where support for SMEs might be needed.
“Overall, confidence levels of small business owners and decision makers across the UK are high. This positive outlook suggests that small merchants are prepared to navigate potential uncertainties and continue to thrive.
“We have provided tips off the back of our findings for those just starting out in business, or who are looking to deal with unexpected market fluctuations on our full campaign page.”
For more information and business advice, please visit the full campaign page here: https://www.sumup.com/en-gb/business-guide/uk-business-confidence-report-2024/
