So-called ‘micro high growth businesses’ could be vital to getting the UK economy out of recession, according to a new study into the performance and prospects of 500 UK small and medium sized businesses (SMEs).
Invoice finance provider Bibby Financial Services found that during the second quarter of 2012 firms with a turnover of between £250,000 and £1 million are reporting better trading conditions to their larger counterparts.
In the £500,000 to £1 million turnover bracket, 19% of firms state that business has never been better, compared to a UK average of just 6%. Also, only 1% said conditions were tough and they were only just surviving, while the average for the study stood at 11%.
And in the £250,000 to £500,000 bracket, 54% of firms are seeing lapsed customers returning. As a result, 44% of these businesses are seeing an increase in orders, up from just 36% in Q1 2012, and considerably higher than the average 23%.
Staff motivation is also on the rise among companies of this size, with 46% reporting an improvement compared to just 26% of businesses with a turnover in excess of £20 million.
“It’s great to see signs of growth among smaller businesses,” said Edward Winterton, executive director at Bibby Financial Services. “Now is certainly the time for ambitious owners of small businesses to take the bull by the horns and make the most out of opportunities which present themselves.
“Historically, high-growth SMEs have played a major part in leading the country out of recession and we are seeing the same thing happening again.
“Of course there is a great deal of hard work to be done before the nation’s economy is out of the woods but we would urge businesses on an upward trend to make the most of any opportunities that pass their way, be it exploring export markets utilising social media or recruiting the very best talent.”
Winterton added: “It is also important the growth of any company isn’t restricted by a lack of funding and so we recommend business owners consider funding options that ensure a healthy cash flow is maintained as they come to manage larger order books and grow their businesses.”