Only one fifth (20%) of Britain’s 4.9m small businesses say they are feeling the benefits of the economic recovery, highlighting the need for greater collaboration and support for SMEs, which contribute nearly half of all private sector turnover in the UK.
The report, from collaborative small business network and advice hub Ingenious Britain, shows 53% of small businesses believe their companies are feeling the recovery ‘a little bit’, while 28% say their situation has either remained unchanged or has even deteriorated.
In findings that reveal the fragile nature of the UK’s small business sector the survey also revealed 18% of small businesses have only one month’s worth of savings in the business., If faced by a sudden £2,000 bill, 53% of small businesses would have to look to fund it from outside of the business: 33% either wholly or in part from personal savings, 16.5% from either a personal loan or a credit card, whilst 6% said they could not afford to cover such a bill.
“In the last year we saw a record number of businesses being started in the UK, with over 500,000 beginning to trade in 2013,” said Marlon Wolff, CEO of Ingenious Britain. “Small businesses are the bedrock of the UK economy, employing over 24m people in total. However we need to provide those businesses with more support and opportunities to collaborate if the numbers that fail to survive one, two or three years are to be improved.”
“The central ethos of Ingenious Britain has always been collaboration and that’s one of the reasons behind Ingenious Britain Live! on 4-5 September 2014. We can see an urgent need borne out by these figures to get small businesses sharing knowledge and contacts, bringing them together so that those who are just starting out can learn from those who have already been through the mill and have emerged successfully, as well as helping small businesses and larger businesses work together for mutual benefit.”
Ingenious Britain Live! will bring together thousands of small businesses with a range of big businesses and sponsors, offering mentoring and advice, exchanging best practice and seizing new opportunities to grow their business.
The survey’s findings on business savings are similarly alarming, with 19% of small businesses saying they have one month’s savings within the business and 32% saying their business has no savings at all; 49% of small businesses questioned had between three and six months’ worth of savings in the business.
In terms of personal income, of those questioned, the small business was the primary job for 82% of respondents, yet 51% had had at least one month in the last year when they had been unable to take any money out of their business. 43% reported being currently unable to save any money personally.
Mike Smith, director of SMB at Virgin Media Business, one of the sponsors for IB Live!, said: “This research demonstrates that we are only at the early stages of the economic recovery – collectively there is much more to be done to ensure that the momentum continues.
“We’re committed to supporting this sector and recently hosted a brainstorm on the EDF Energy London Eye, where large and small businesses came together to debate the future of six key sectors. This kind of collaboration between big and small businesses is vital to ensure that SMEs have the support they need to succeed in today’s highly competitive global marketplace. “