Over 80% of Scottish SMEs see risk to viability over next 12 months, finds report
More than 80% of small and medium-sized enterprises (SMEs) in Scotland believe the viability of their business is at risk over the next 12 months, according to new research from Aberdein Considine.
The survey, carried out by Censuswide on behalf of the legal firm, highlights the mounting economic pressures and uncertain market conditions faced by small to medium businesses in key sectors across the country. SMEs account for over 99% of all private sector businesses in Scotland, and the survey captures their views one year out from the next Holyrood election, as candidate selection has begun.
Respondents pointed to several factors that present financial challenges, including increased costs, supply chain disruption, access to finance and uncertainty arising from policy and regulatory changes, with the findings indicating that these challenges are being felt by businesses of varying sizes within the SME category.
The report also found that concerns around business viability were not limited to specific industries, with high levels of risk perception present across the energy, retail, hospitality and food and drink sectors. The findings suggest that a broad cross-section of Scotland’s SME community is currently operating in an environment they view as unstable or unpredictable over the coming year.
Scottish SMEs poised for a return to full-time office working
The appetite for a full office return stands out against wider workforce trends, with over 90% (90.52%) of respondents noting a return to full-time office working as a priority over the next 12 months.
This marks a notable shift in workplace planning, with the majority of businesses indicating a move away from hybrid or remote arrangements.
Scottish government policy changes biggest challenge to business growth
Equally significant is the pressure from policy and taxation, with over a third of businesses surveyed (37.16%) listing Scottish Government policy changes as the biggest challenge to business growth.
Respondents reported that ongoing policy shifts have created difficulties in planning and investment, suggesting a widespread concern among firms about the impact of regulatory uncertainty on their ability to grow and operate effectively in the current environment.
On a more positive note, over half (52%) of Scottish SMEs plan to invest in sustainability and ESG initiatives over the next 12 months; 39% intend to prioritise growing their workforce over the same period; and 58% are optimistic about the benefits associated with the energy transition.
Ritchie Whyte, partner, Aberdein Considine, said: “Our survey’s findings paint a picture of a very challenging environment for Scotland’s small to medium-sized businesses. We know that businesses are facing intense financial pressures, and the fact that over 80% of firms now doubt their viability demonstrates the urgent need for targeted support, policy intervention and sustainable strategies to ensure not only their survival, but long-term resilience.
“Perhaps most telling is that more than a third of SMEs point to Scottish government policy shifts as their biggest obstacle to growth. In practice, this means every tax or regulatory change can feel like an extra weight at a time when firms can least afford it. With less than a year to the next Holyrood election, we hope policymakers will take note. The pace of change must be managed carefully if businesses are to have the confidence to invest and expand.
“While the findings show that a significant number of Scottish SMEs – many of which are family-owned and run – are facing real concerns about viability in the short term, they also point to a business community actively planning for the future.
“The result that more than 90% of respondents say they are prioritising a return to full-time office working seems to run counter to broader workforce trends, but it perhaps highlights a focus across the industry towards strengthening collaboration and enhancing productivity. While approaches may vary, there is a shared intent among firms to stabilise operations and support long-term future growth.” The full survey findings can be accessed here.