One in three small businesses have failed to grow since 2010
Business owners have claimed that access to growth capital, too much red tape and "lack of bank support" are holding them back from expanding
One in every three small and micro businesses in the UK has failed to grow in the last five years, a study by accountancy group AAT claims.
Alongside a lack of revenue growth, 31% of businesses also reported that their profits hadn’t increased in the last five years either – citing a lack of capital to expand, red tape and poor bank support as the cause.
The industries with the most small businesses citing no growth in the last five years were IT and telecoms (43%), the arts (39%), construction (34%), retail (30%) and professional services (33%).
In spite of poor performance over the past five years, the respondents (1,000 small UK firms) have confident projections for the next five years. 76% predict that their revenues will have increased by 2020, while 78% expect to see a rise in profits over the same period.
Given the impending Autumn Statement, 16% of the small firms surveyed said they wanted the government to provide more support in areas such as tax breaks, funding and training, while 19% called for more help to expand into new markets.
AAT chief executive, Mark Farrar, said of the findings: “Growing your company can be one of the hardest stages in the life of a business but with the right skills it can be done.
“Growth can put pressure on cash flow which is why many businesses fail when they’re expanding. Having the necessary financial skills and a clearly defined business plan are essential tools to help firms expand successfully.”