79% of SME employers generated a profit or surplus in their last financial year, despite rising costs, finds survey
October 2023 - Business Support
79% of SME employers generated a profit or surplus in their last financial year, despite rising costs: A survey of SME employers has revealed optimism for the sector with more than three-quarters reporting turning a profit or surplus in their last financial year, despite experiencing rising costs. This was an increase of six percentage points on the previous year (2021) and a 12 percentage point uptick on 2020.
The survey was conducted by the Department for Business and Trade between November 2022 and April 2023 and polled 7,000 UK SMEs.
The annual survey asked respondents about the factors impacting their businesses, finding that the main obstacle reported in 2022 was the hike in energy prices, with 60% citing it as their main challenge. This was followed by competition and taxes (both 41%), staff recruitment and skills (40%), regulations and red tape (39%), Brexit (32%) and other issues related to costs (non-energy 32%). Other obstacles mentioned were late payments (29%) and Covid-19, which was still a concern for a third of respondents (33%).
Looking at external finance, the survey found that at the time of the polling, 75% of respondents reported having some form of external finance, up by a percentage point from last year's 2021 survey (74%), and up three since 2020 (72%). This compares to 63% before the pandemic. Around a fifth of SMEs polled reported that government or local grant schemes or loans related to Covid-19 were still being used by their organisation, found the research. Just 11% of respondents sought external finance in 2022, compared with 8% the previous year.
The research also found that more than a third of SMEs polled reported an increase in staffing numbers (36%) in the last 12 months. Furthermore, three-quarters (74%) said they are aiming to increase their sales over the following three years, which was a slight fall on the previous survey (76%). Of those SMEs who said they have growth-related activities planned, more than half said these have been impacted due to rising costs (55%).
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