Southern SMEs eye expansion as confidence grows
More than half a million small businesses in the South of England are planning to relocate or expand their business operations as confidence in the economy improves.
The figures from Clydesdale Bank paint a positive picture of the market for small businesses, with the majority of expansion plans associated with an expected increase in activity.
More than a quarter of SMEs in the south are planning to expand their existing locations, move into larger office spaces or add locations to their portfolios in the coming year.
Improved economic conditions were behind the increase in confidence levels, with 43% of SMEs believing that conditions are better now than they were 12 months ago.
As a result, one in three firms is planning to invest in various means that encourage business growth in order to expand during the next five years.
This is especially important given recent research that suggested that more than half of new SMEs fail within five years of being set up.
One of the major outlays for these businesses is investing in the locations where they plan to operate from – office or warehouse assets are required by the majority of firms.
Of the 28% of businesses who were looking to move or expand, one third revealed they would consider purchasing premises outright if funding packages were available.
Another factor in this decision would be if it was possible without the need of a large deposit, as most smaller firms did not have sufficient extra finance to cover such a move.
In certain instances, business restructuring could be required to ensure that expansion can take place, while assessments could also take place in a bid to remove any unnecessary business expenditure.
Such moves could prove vital to expansion in the long term, especially in some southern parts of the UK where property prices have risen at significantly faster rates than elsewhere.
By Phil Smith