SMEs are more enthusiastic about running their business this year, with more than half predicting strong growth in the first half of 2014, according to Aviva.
The insurer’s research shows that whilst many SMEs are entering 2014 with renewed optimism and enthusiasm for running their business, they also recognise the need to take extra steps to keep their business healthy in the first six months of 2014.
According to Aviva’s bi-annual SME Pulse, which surveys 500 SMEs, businesses have a more positive outlook for the first six months of 2014 compared to the same period in 2012. 52% of those surveyed predict strong or improved growth for their businesses during the first six month of this year, a three-fold increase on what had been predicted for the same period in 2012 (19%).
Looking at expectations on trading conditions 62% of the survey respondents say trading conditions in 2013 have been largely as they expected (36% in 2012) and 34% say conditions have been tougher than they initially expected (43% in 2012).
When asked in 2012 32% said they had lost the initial enthusiasm they had for running their business, but in the 2014 survey this falls to only 8%.
Just 4% say they would consider a return to the workforce as an employee – six times fewer in comparison to the same period from 2012 (25%) suggesting more businesses are enjoying being their own boss.
The survey found that many small business owners enjoy a balanced lifestyle. 41% feel they have good work-life balance and only 9% believe that running their business has a negative impact on their relationships with family and friends.
“The increased optimism we are seeing is great news for the economy with more than half of the SMEs surveyed telling us they predict strong or improved growth in 2014,” said Robert Ledger, head of small business at Aviva. “This supports PwC reports thattheUK will remain the fastest growing major European economy in 2014.
“It is also a promising indicator of a return to business confidence to have so many businesses say they still really enjoy what they do. Qualities like passion and commitment to run their own business, especially when trading is tough, really shows the strength that SMEs have, and need, to survive.
“Our survey results also suggest SMEs are interpreting market conditions better with almost two thirds saying trading conditions in 2013 were largely as they expected them to be. Business acumen is really important in judging when to be prudent and when to take opportunities to grow.”
Aviva’s Pulse also shows that SMEs recognise the need to actively manage their business performance in the first six months of 2014, with many taking extra steps to keep their business healthy. Diversification, by expanding their product offering or targeting new customers, has increased 50% since 2012 to become the top step for a third of businesses.
Unsurprisingly the primary concerns for SMEs for the first six months of 2014 remain largely unchanged over the last couple of years with focus on maintaining good cash flow (30%) and halting a decline in sales (19%) coming out as top concerns.