Despite current economic uncertainty, an online survey of small business (SMB) owners and accountants in the US and the UK finds a mood of optimism in both countries.
Online accounting software company Xero, which surveyed a total of 817 individuals for its ‘Make or Break Report 2017’, found SMB confidence remains high, particularly with very young businesses, despite economic uncertainty being the most pressing concern for UK and US business owners. All participants either owned and managed a business with less than 20 employees, or provided external accounting services to that size of business.
Ninety-four percent of one year old and 84% of two year old businesses reported they felt more confident going into 2017 than the previous year, and 79% of small businesses said they felt confident about their business’ survival this year. For those going through a tougher time, nearly one in five said they expected 2017 to be a turnaround year for their business.
The report finds the upbeat mood of SMB owners is driven by:
- Putting particular emphasis on remote working and flexible working hours.
- Seeing the positive aspects of changing Brexit policies and infrastructure.
- Prioritising the health of themselves and their employees.
- Continuing to take risks and seeing mistakes as fundamental learning experiences.
Responses from UK small businesses found 74% remain confident about the future despite Brexit and the resulting economic instability being the current top concern. Nearly a fifth (18%) said that Brexit would reduce some of the restricting red tape and legislation surrounding the European Union (EU), increasing trading and local buyers as a result.
Their view was shared by US small businesses who were asked the same question in relation to Donald Trump’s presidency, highlighting fewer regulations as the most positive impact
The report finds that successful SMBs are exchanging traditional office structures for remote working and flexible working hours (42%), hailing this as the biggest driver of productivity for themselves and their staff in 2016, while 94% of SMB owners use cloud software report benefits, citing paperless systems, remote working and simplified software management
More than three in four (78%) believe the personal health of them and their staff directly impacts on the success of their business going into 2017, with getting enough sleep, regular exercise and a good work-life balance all cited as important factors.
Risks are seen as part of the job; 54% of SMB owners said they have taken financial risks with their business. When these risks did not result as expected however, 77% said they had no regrets and see the mistakes as a fundamental learning experience.
Business owners were again found to be optimistic when forecasting despite the economic outlook and 69% said they are optimistic and aggressive about their achievable targets. For 52% Brexit was not seen as having an impact on their business and 74% were confident in its success, regardless of instability.
While confidence and optimism from small businesses was found to be the underlying trait of SMB owners, the report revealed areas for improvement and viewpoints to consider, with 42% considering their accountant to be a trusted business advisor or mentor – although over half do not necessarily always follow their advice
Only one in six said they were worried about automatic pension enrolment, but behind Brexit and changes to the national living wage, auto enrolment was the third policy accountants were most concerned would impact their clients in 2017
Chasing payments for overdue invoices still plagues as the biggest time waster for one in five SMB owners across the UK and US. The threat is compounded by the importance small businesses put on cash flow in 2017 – for 34% cash flow was said to be more important than ever given the instability of the economy
Gary Turner, UK co-founder and managing director of Xero said: “Our report has revealed a remarkable trait among small businesses to look on the bright side, particularly in the current climate when faced with so much uncertainty.
“Given the importance of small business health on our economy here in the UK, it is fantastic to see that SMB owners are feeling so confident about the future. But, as cash flow and healthy finances have never been so vital, owners must keep a sense of realism and listen to external advice and support to ensure that business continues to grow and prosper through the next few years.”
The General Data Protection Regulation (GDPR) will be enacted on May 25 2018 and promises to revolutionise the way that firms collect, store, process and protect the personal information of customers, clients and employees.
Today sees the publication of set of global principles of good practice in the foreign exchange market.
The one-notch downgrade by the credit ratings agency is the first for nearly 30 years.
The new rules aim to prevent companies overpaying tax and to increase the competitiveness of the eurozone.