International association of bookkeepers

SMEs positive about the future, survey finds

Small and medium sized firms in the UK, US and France are optimistic about their post-pandemic prospects, according to a new survey from Sage.
It found that three-quarters of SMEs surveyed are positive about the future of their business and expect to see growth in the next year. Optimism is mainly driven by the vaccine rollout programme (45%), being able to see customers in person (35%), and projections of increased consumer spending (32%).
More than eight in 10 SMEs do not expect another lockdown, with most SMEs feeling optimistic that their business will return to pre-pandemic levels this summer – both in terms of profitability and staffing levels. In fact, 81% of SMEs across markets think their business will be totally back to normal profitability this summer. This confidence is led by the US (82%), followed closely by the UK (79%).
An ability to adapt was critical during the pandemic. Many (60%) SMEs say that they have coped well with the barriers Covid-19 placed on them, making big changes to how their business operates. Most commonly, in the UK, 35% of SMEs said they cut overhead costs and, because of further financial barriers, 25% said they relied on their savings to make it through. This behaviour was also reflected in the US, with 38% cutting overhead costs and 27% relying on savings. In France the figure was 35% and 21% respectively.
SMEs turned to technology to overcome difficulties and create efficiencies within the business. In fact, 76% of SMEs say they now rely on technology. In the UK, 52% used new technology to sell more and stay connected with customers or improve how their business operates. In France, 67% used technology in this way while 64% of SMEs in the US also invested in new technologies, nearly all of whom said this increased investment improved their business.
Renewed optimism is driving hiring plans, and as SMEs grow their workforce, they will continue to look at how they can increase diversity and prioritise employee wellbeing. One-third of SMEs are expected to hire in 2021.
Since the start of the pandemic, SMEs have been thinking more about their wider role in society, ranging from employee wellbeing initiatives, to being more environmentally sustainable, and becoming a more diverse employer – with many SMEs expected to make further improvements in the upcoming year. In the UK, there will be a bigger focus on ways of working and employee wellness with 37% looking to increase physical wellness, and in the US, 47% of SMEs will look at improving flexible working.

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