Senior decision makers from SMEs in the East Midlands are the most optimistic of any region in Great Britain, according to latest Santander Corporate & Commercial Business Growth annual survey.
The research found that small and medium businesses with up to 249 employees in the East Midlands region are predicting average turnover growth of 109 per cent, the equivalent of £3.7m, over the next five years. The survey suggests a strong outlook for short-term growth, with more than half (58 per cent) of East Midlands SMEs reporting growing the business organically as an immediate priority.
Just under a third (30 per cent) wish to focus on retaining existing staff and more than a quarter (27 per cent) plan to introduce new products or research and development. On a national level, senior decision makers from SMEs are predicting strong levels of growth over the next five years, with small and medium businesses with up to 249 employees predicting average turnover growth of 37 per cent, the equivalent of £2.4m, over the next five years. Small businesses in Great Britain are the most optimistic, forecasting an average increase in turnover of 69 per cent.
This compares to medium-sized businesses which are predicting an average increase in turnover of 25% over the next five years. The survival of their business, which was the top short-term priority in 20142 (57 per cent), is now a priority for 30% of SME senior decision makers, suggesting more companies are now focusing on growth. More than a quarter (27 per cent) of firms said they were focused on introducing new products while nearly a fifth (18 per cent) said they were looking to hire new staff – compared to 12 per cent who were prioritising this in 2014. This improving business confidence is leading to more companies looking internationally for growth than any point in the last four years. Nearly one in five (18 per cent) describe international expansion as the ultimate aim for their business compared to 6 per cent in 2014.
Regional growth (37 per cent) remains the most popular overall business aim for SMEs in the East Midlands, with selling the business and retiring (13 per cent) and building it internationally (12 per cent) also popular aims. Despite the strong optimism and renewed business confidence, businesses in the East Midlands still report facing challenges. A tough trading environment was seen as a challenge to growth, cited by 37 per cent of respondents.
The ability to hire and retain the right staff also remains a challenge, cited by 15 per cent of business owners in the East Midlands. Nick Pulley, regional director, East Midlands, Santander Corporate & Commercial, said: “It’s extremely encouraging for the East Midlands region that SMEs, the lifeblood of the economy, are predicting the highest level of growth over the next five years of any GB region.”