NOVUNA BUSINESS FINANCE STUDY: SMALL BUSINESSES TAKING PROTECTIVE MEASURES TO STRENGTHEN THEIR BUSINESSES

• Plans to hire more staff, expand into new markets, and invest in equipment all fall significantly in the last year
• Meanwhile, defensive measures such as improving cashflow, streamlining supply chain, and minimising fixed costs all increase

LONDON, April 3, 2023 /PRNewswire/ -- With the threat of a recession this year significantly reduced, new research from Novuna Business Finance suggests a mixed picture of optimism and caution amongst small business owners' plans for the next three months.

A Novuna poll of over 1,000 small business owners and senior decision makers showed that two thirds (65%) of business owners said they were working on specific plans to try and achieve business growth in the next three months.

Defensive measures topped the list - keeping fixed costs down (57%), improving cash flow (32%) and being stricter with being paid on time (25%).

Tracking responses from previous quarters, the results showed that the proportion of businesses adopting defensive measures to strengthen their businesses had steadily increased over the course of the last year. The proportion addressing cash flow issues rose by 5%, while those ensuring fees were being paid on time rose by 4%.

By sector, the story was a varied one. Those small businesses in manufacturing were most likely to be putting plans in place to protect their business (81% vs 65% national average), whereas finance and accounting was least likely (58%).

Small firms in the retail sector were most likely to be focusing on keeping fixed costs down (70% vs 57% NA), however this represented a decrease on this time last year. In place of this was a growing focus on streamlining their supply chain (17% from 14%) and hiring more people (8% from 3%).

Joanna Morris, Head of Insight at Novuna Business Finance, commented: "The level of caution that we are seeing in these results is understandable. Still reeling from the effects of the pandemic, Brexit, a cost-of-living crisis and soaring inflation, small businesses are becoming accustomed to major issues that create choppy waters. While there are positive signs of confidence, these are underpinned by a continued feeling of uncertainty. Until these doubts pass, small businesses are likely to remain cautious in their plans."