UK small businesses well placed to survive recession

Optimism is returning to the small business sector with over half expecting to expand over the next three years, according to the Quarterly Survey of Small Business in Britain, the longest standing survey of the sector set up by the Open University in 1984.

Although nearly half (49%) the small firms questioned had seen sales fall over the last 12 months, fewer expect to cut staff and 62% have made no employment changes during the same period.

Of the 50% who are most optimistic about the future, 34% had bucked the prevailing trend and seen an increase in sales over the last year.

Professor Colin Gray, professor of enterprise development at the Open University Business School, says:

These second quarter results show the mood of UK small businesses as one of cautious optimism. The decline appears to have slowed and may be levelling out and points to small businesses having a very different experience of recession.

Despite these possible green shoots, the survey highlights how the recession may have had an impact on the ambition of Britain’s SMEs with 37% saying they have now set only modest growth targets, while 32% aim to keep their businesses the same size.

When asked what were the biggest factors affecting business at the moment, the economy and lack of demand topped the list of concerns (61%) with cashflow, late payment (33%) and government red tape (31%) following on.

[Picture credit: lrargerich licenced from Flickr]