British business feel more secure than last year
Businesses in the UK have reported stronger feelings of confidence this year compared to 2014, a recent survey has confirmed.
According to the poll, a staggering two thirds of businesses are more confident now than they were 12 months ago with leisure and manufacturing industries reporting the strongest feelings of security.
The results, which are true for businesses with annual turnovers of £2-25 million, also reveal that half of businesses are planning to invest in themselves over coming months.
The average size of these investments has increased by 20% over the past year with the most common reason for investment being to support future growth.
More than one quarter (27%) also plan to upgrade vital equipment as part of their investments; a clear effort to bring businesses forward and ensure outdated facilities do not restrict performance.
By using future investment and improved confidence to support growth, UK businesses hope they can maintain current performance levels and improve themselves where necessary.
84% of those who will invest in their business in the immediate future expect their efforts to increase turnover or profit while 83% think it will allow them to maintain their competitive edge.
80% even anticipate a boost in efficiency as a result of upcoming cash injections.
Unsurprisingly, IT is the most common area for investment with 69% of firms spending in this area while regionally it was England’s South West which showed the highest confidence levels at 73%.
Reality must match expectations
Speaking about the results of the survey, Ian Cowie – the Managing Director of the finance firm behind the research – said that it “provides a real opportunity” to see how the country is responding to “continuing improvement in the economy”.
He concluded that it is “encouraging to see an overall positive position and outlook” but businesses should remember the importance of realism when planning investment or expansion in response to heightened confidence.
Misplaced trust in business performance or economic activity can potentially lead to financial problems for the companies involved.
Although seeking advice or guidance from an insolvency practitioner can help in these situations, businesses would do best to avoid this action altogether if possible.
That means carefully monitoring all aspects of the business’ cashflow and ensuring that necessary investments are made to boost growth but without undermining the company’s financial security – no matter how high the confidence levels.
By Phil Smith