'Grit and resilience' driving small businesses - The Retail & Hospitality Design Forum
  • Covid-19 – click here for the latest updates from Forum Events & Media Group Ltd

  • Slide
  • ‘Grit and resilience’ driving small businesses

    Set against a backdrop of unprecedented change – British small businesses are remaining stoic and are facing the next three months with renewed focus and a determination to succeed.

    That’s according to research from Hitachi Capital Business Finance shows that for the sixth consecutive quarter confidence levels have varied only by 1%, with the number of businesses striving for growth (36%) outweighing those that are contracting (16%).

    Despite the constant threat of a pre- and post-Brexit crisis, a General Election and a prolonged period of market uncertainty, the research suggests that small firms have shown remarkable resilience throughout the Brexit era and are remaining ‘optimistic’- with the majority of businesses seeing ‘business as usual’ (47%) as a viable achievement in the busy run up to Christmas.

    Sector variations show a mixed outlook:

    However, not everything is black and white. Although nationally business confidence has remained firm, the picture is quite different by sector.

    Many of the businesses that saw growth last quarter, such as those in the Legal, IT and Telecoms sector, have fallen back this quarter (Legal: 44% in Q3’19 Vs. 30% Q4’19), (Telecoms: 41% in Q3’19 Vs. 36% Q4’19). Conversely, those sectors that saw a fall in confidence during Q3 (Construction, Retail and Manufacturing) have bounced back.

    Business outlook by sector over the last six months

    Q4 2019

    Net %that predict


    Q3 2019

    Net %that predict


    Q2 2019

    Net %that predict


    Finance & accounting 47% 48% 33%
    Real estate 43% 32% 45%
    Retail 39% 34% 40%
    Manufacturing 39% 30% 38%
    Media & marketing 38% 37% 36%
    Hospitality & leisure 37% 27% 29%
    IT & telecoms 36% 41% 38%
    Construction 32% 26% 31%
    Legal 30% 44% 41%
    Transport & distribution 29% 27% 25%
    Agriculture 25% 32% 27%

    Small businesses in the Agriculture and Transport/Distribution sectors appear to be in poorer shape, with much lower net confidence levels this quarter than any other sector (25% and 29% respectively). This is perhaps not a surprise given these sectors, potentially, could be the those most directly affected in the short-term by Brexit.

    Small business outlook: Six successive quarters of consistent outlook, set against a context of market uncertainty

    % that predict net growth (significant or modest/organic) % that predict significant expansion
    Q3 2018 36% 7%
    Q4 2018 36% 5%
    Q1 2019 36% 6%
    Q2 2019 34% 4%
    Q3 2019 35% 5%
    Q4 2019 36% 7%

    Regional spotlight 

    Around the UK, the research suggests a varied picture of confidence levels. Small companies in London and the South East are breaking away from the majority of the regions and are powering ahead in terms of growth forecasts.

    Over two in five businesses (45%) in the Capital are confident of growth in the next three months and a further 11% are confident of significant growth. A similar picture emerges in the South East (40%) which stands in marked contrast to businesses in Wales and Scotland (24%) who are lagging behind in terms of business confidence. Businesses in Scotland are suffering the most – with 11% saying they are going to struggle to survive until Christmas.

    With the majority of businesses around the UK remaining cautious, forecasting a period of no change as the best-case scenario – over one in two businesses in the East of England (54%) are more likely to view ‘business as usual’ as an achievable goal for the next three months, compared with businesses in London (40%) and the South West (41%).

    Young businesses driving confidence

    Those small businesses that have been trading for less than five years have seen a major turnaround in 12-months. After a bleak October 2018 with only 40% forecasting growth, they are now driving confidence levels (54%).

    Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance, said: “As the Brexit countdown to January 31st 2020 starts again, the research suggests that small businesses are frustrated watching a continuous game of political table tennis and have quite rightly decided to focus on the things that are within their control.

    “Whilst the Government are putting a freeze on preparing for Brexit – our small businesses don’t have the luxury. Whilst many are citing market uncertainty as a barrier to growth, they are nonetheless planning ahead with cautious optimism and this is important given, for many sectors, the Christmas period is a critical period for sales and growth.”


    Stuart O'Brien

    All stories by: Stuart O'Brien

    Leave a Reply

    Your email address will not be published.