Research reveals 1 in 3 expect growth – an increase from just 1 in 12 at the start of 2021
18th January 2022: After a turbulent couple of years, the outlook for small businesses across the UK is improving. The launch of the third annual UK Small business challenges report by takepayments Limited celebrates a new chapter for SMEs as four times more businesses expect to see growth in 2022.
Almost one in three (32%) small businesses expect their company to grow in 2022, in comparison to one in twelve (8%) the previous year. Others expect their business to remain in its current state (13%), to diversify (15%) or to sell (12%) according to the payment solutions provider.
Which industries are the most optimistic?
Interestingly, industries that have struggled during the pandemic are amongst the most optimistic this year. The beauty and wellbeing sector, alongside hospitality and events came joint top with 38% expecting to see growth. Marketing, advertising and PR, as well as law and security also shared their optimism.
|Industry sector||Percentage of businesses that expect to grow in 2022|
|Beauty and wellbeing,
Hospitality and events,
Law and security Marketing,
Advertising and PR,
|Leisure, sport and tourism||37%|
|Charity and voluntary work Environment and agriculture||36%|
Sandra Rowley at takepayments limited said, “It’s great to see the tide finally beginning to turn for small businesses in the UK. When we started this annual research report at the start of 2020, we had no idea what lay ahead in terms of the pandemic. It’s become a barometer to measure how UK SMEs are faring against common challenges.
We’ve also been able to see where the opportunity lies. The research findings have shown how adaptability has been key to many businesses’ success and that it will be just as important in 2022.”
How will businesses adapt in 2022?
As businesses look to grow and diversify, a few common themes appeared in the report such as the environment, sustainability and technology.
Environment – A new challenge that has entered into the report this year is the environment. It came out as the second most prevalent concern for businesses this year. Almost a quarter (23%) say that implementing sustainable practices will positively impact the bottom line for their business and a third (33%) say that becoming more sustainable will give their business a competitive advantage.
There’s also a sense that businesses need to be genuine, with a quarter expecting to see companies that “green wash” increasingly exposed.
- Over a third (39%) are passionate about making their business more sustainable
- 87% think that the government needs to offer more financial incentives for businesses to go green
- Lack of technology (30%) is listed amongst the biggest barriers to becoming more environmentally sustainable
Technology – Improved and new technologies have played a role in overcoming challenges such as coronavirus restrictions and changing consumer buying habits. Keeping up with rapidly moving technology demands time, knowledge and financial investment.
The report shows businesses turning to tech to help with the pandemic, cyber security challenges and online selling.
- 78% of business will continue using QR codes in 2022
- Cyber security is a challenge concerning 27% of small businesses
- Lack of knowledge around online marketing (channels inc. social media, email) is a concern for a third of businesses (33%)
Expected challenges in 2022
A smaller percentage of respondents still said that they will close their business (10%) or that they think it will struggle (10%) in 2022.
The research asked 1,050 small business owners and senior decision-makers about their biggest concern for the year ahead. Coronavirus is still the top concern (27%) however, Brexit has dropped down the list dramatically (5%), as have financial concerns (9%).
|Concern||Percentage of businesses who say it is their biggest concern for 2022|
|Continuing coronavirus restrictions||27%|
|Environmental and sustainability challenges||22%|
For further information on the challenges facing UK small businesses read the 2022 report.