Aldermore says there are signs of recovery for small and medium-sized enterprises (SMEs), as research reveals plans to invest in their businesses in the next year, coinciding with the easing of lockdown restrictions.
SMEs plan to spend an average of £97,000 to grow their business in 2021 and recover from the Covid-19 pandemic.
Over the next 12 months, 25% of SMEs will invest in their online presence, with 21% advancing their digital marketing. A further 21% will spend on new equipment and 20% will invest in their staff through training. Meanwhile, 18% plan to diversify into new products and services. 10% will invest in greener/more sustainable activities.
Apart from Covid-19, 15% said the main priority for the next 12 months in recovering from the pandemic will be expanding their customer bases. The other key priorities for SMEs include managing changes from Brexit (13%) and sustainability (11%). Meanwhile, 10% will be focusing on improving their current products and services.
Tim Boag (pictured), group managing director, business finance at Aldermore, said: “It’s encouraging to see that SMEs are investing in their recovery from the Covid-19 pandemic. Recent data reveals a vastly improved near term outlook for businesses, with the easing of restrictions. Confidence from SMEs is growing, and this is reflected in plans to invest in the growth of their businesses in order to recover effectively from the pandemic.
“During the peak of the pandemic last year, we launched our ‘Small But Mighty Businesses’ campaign to share real stories of SMEs who were tackling the challenges of Covid-19, and how they were innovating and supporting each other. We’re now launching new content and providing additional guidance to SMEs including tips on how they can effectively recover from the pandemic, by future proofing their business against future shocks and investing in their business long term.
“A good starting point would be to research the various funding options available such as specialist finance and how to make the most of the savings they have. The economy is seeing signs of a recovery and we’re here to back businesses as they look to grasp the opportunities of the future.”
Business confidence is now at its highest level since 2014 following the easing of restrictions on 12 April, and two-thirds of SMEs expect their performance to improve between April and June 2021.
This growing confidence is translated in the recent performance of businesses, with SMEs seeing a 12% improvement in monthly business income since July 2020, at which point SMEs were experiencing a 30% decrease in their usual income. 9% of SMEs have seen a decrease in income of more than 70%; however this is a significant improvement on the 18% who were experiencing this in July last year.