SMEs target growth in 2015, but it is not without risk
Despite the fact firms are displaying less confidence that in previous quarters, three in five UK companies still expect to grow in 2015.
That is according to the Federation of Small Businesses (FSB) whose latest Small Business Index marks a gradual decline in confidence from earlier in the year.
Despite this low confidence, firms still expect to hire more staff, increase their exports and expand their businesses – all of which are not without risk.
Productivity has increased throughout 2014, increasing by 1.1% in the fourth quarter to boost both the economy and worker wage packets. Further business growth will require a strong economy to make hiring new staff an affordable process; especially if hiring more people boosts sales and production.
Firms will also require the necessary financial support in order to achieve their potential as 22% of companies reported that the cost of finance was a barrier to their growth.
This situation was found to be worst for the smallest firms as large amounts of finance are not readily available. Just 11% of these businesses reported that they found new credit affordable, compared to 44% of companies with 51 staff or more.
For some companies, financial issues can be resolved by seeking professional help via corporate recovery professionals.
Such methods can mean that companies can streamline their operations, reducing costs and enhancing the possibility of future growth.
Schemes like Funding for Lending can provide a certain degree of support while other recently modified government programmes are also seen as crucial.
Expansion is not without risks, especially when economic conditions are not perfectly suited to growth. The situation in the Eurozone might be seen as a cause for concern amongst some UK businesses but the strength of the home economy provides an opportunity for many to thrive.
Any growth should still be carefully monitored for the first signs of trouble; especially in situations where large financial outlays are involved.
By Phil Smith