Small firms “not achieving full potential” for growth, study claims

Two-fifths of businesses admit a lack of innovation and proactivity

Two-fifths of small and medium-sized firms in the UK could be doing more to accelerate their business’ growth, according to a new study.

The Close Brothers Business Barometer, a quarterly survey of 700 owners and senior managers at small and medium-sized firms across a variety of sectors, saw a sizeable minority admit that they could be more innovative and proactive when it came to identifying growth opportunities.

In contrast, less than a third of companies surveyed felt that they were sufficiently innovative.

Additionally, whilst 38% of firms intended to seek funding for growth within the next year, half of that proportion expressed concern that their request for finance would be turned down by their bank, suggesting a lack of confidence and knowledge of alternative funding options.

Merchant banking group Close Brothers Asset Finance, which commissioned the study, said it highlighted the need for financiers to back small businesses with the capital they needed to invest in innovation.

Mike Randall, CEO of Close Brothers, said: “While many firms are striving for growth our survey shows there are factors holding them back from achieving their full potential.

“Innovation is a critical part of many firms’ growth strategies and yet our survey has highlighted that the ability to be innovative is a stumbling block for many businesses. Less than a third of the companies we talked to felt that they are sufficiently innovative.

“As the economy continues to gather pace, we need to prioritise the creation of a business environment that encourages the commercialisation of new ideas.”

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