Study reveals growing business confidence amongst UK SMEs as they look to expand
New research from the UK’s leading insurance premium finance company, Premium Credit, shows nearly five times more SMEs expect to see growth in revenues compared to those who expect revenues to shrink.
Research from Premium Credit’s Insurance Index, which monitors insurance buying and how it is financed, found nearly half (49%) of SMEs are predicting an increase in revenue in the next 12 months as business optimism builds. Around one in seven (14%) are forecasting revenue growth of 25% or more.
Just 10% of companies questioned are predicting revenues will shrink in the year ahead with 17% saying they will stay the same. Around a quarter (24%) were unable to forecast what will happen to revenues.
The biggest drivers of SME optimism identified by the research were plans to launch new products and expand into new markets. Around 35% expect revenues to increase following new product launches while 34% expect to boost revenues by expanding into new markets.
However nearly one in three (30%) say revenues will be boosted by successful cost-cutting and 29% are banking on the cost of living crisis to ease as the economy improves.
Among firms expecting a revenue squeeze the biggest case of pessimism is their belief the cost of living crisis will not improve. Around 62% of those worried about the future expect the economy to continue to suffer while 42% say their client base has shrunk as firms have gone bust.
Adam Morghem, strategy marketing and communications director at Premium Credit, said: “SMEs have been through a tough period in the last three years with the COVID-19 pandemic being rapidly followed by rising inflation and interest rates.”
“SMEs have been innovative and adaptable throughout the period as they react to pressures on cashflow. Premium finance is a very cost-effective way for businesses to buy insurance, and better manage their finances and cashflow by spreading payments.”
Premium finance companies like Premium Credit provide businesses and consumers with the ability to use a loan to pay for their insurance in monthly instalments. By managing insurance payments in this way, businesses and consumers can spread the cost of their insurance, rather than pay their premiums in one lump sum.