More than 80% of small businesses in the UK are planning growth-focused initiatives by 2025, reflecting increased optimism as companies report the highest growth expectations in two years, according to a study by Novuna Business Finance.
Key areas of focus include driving new business sales (43%) and reducing fixed costs (24%). Diversifying business models and developing new products or services are also top priorities for one in five companies. However, recent changes to National Insurance appear to have dampened recruitment ambitions, with only 7% of SMEs prioritizing hiring seniors and 9% planning to recruit young talent.
Regionally, London leads the way, with 94% of businesses prioritizing growth, followed by the West Midlands and North East with 83% each. Sectors such as media (92%) and manufacturing (90%) are most likely to focus on growth initiatives, highlighting the strong momentum in these sectors.
The findings come as 35% of small businesses nationally reported growth in the past three months, the highest figure in two years. Despite concerns surrounding the Autumn Budget, many SMEs are closing 2024 on a strong note.
Joanna Morris, head of insight at Novuna Business Finance, said: “The percentage of businesses forecasting growth has reached a two-year peak since July. A significant portion are already prioritizing growth projects for the coming year. We want to help companies realize their potential and build on the resurgent confidence we’ve seen this year.”
Financial prudence remains a key theme, with companies looking to address fixed costs and build financial reserves as part of their strategy to ensure resilience in a dynamic economic environment.
The research highlights the determination of UK small businesses to progress and position themselves for sustainable success in 2025 and beyond.