Yesterday, the latest quarterly GDP figures were released showing 0.6% growth in the economy – twice the expansion reported back in April when we asked if the UK was turning a corner on the road to recovery. These figures suggest that this is the case. In fact, this step change is the fastest since 2007, before the recession took hold.
Sir Mike Rake, president of the CBI, recently said "we are beginning to see the green shoots of recovery generally" – though he did add that this may be felt more in some areas of the country than others.
What does it all mean for small businesses?
In simple terms, when the economy starts to boom, consumer and business confidence understandably rises as people are more willing to start spending and investing their cash. Hopefully it will follow suit that banks and other lenders’ confidence will also increase, and more money will be readily available to help businesses fund growth – something we’ll continue to keep a close eye on.
Of course, to take advantage of these opportunities businesses will need access to support and the right conditions to grow.
The cost of lost opportunities
In a recent survey, we found that 53% of businesses intend to grow in the next 12 months. However, the main barriers they identified to achieving that are lack of time and cash.
Improved access to finance (through alternate sources if banks remain risk averse) and making late payment less attractive would go some way to boosting cashflow, while reducing the amount of time spent on unnecessary red tape would help with the former.
This was a sentiment echoed in our latest research on the cost of compliance, which found that whilst the cash costs were £18.2bn for SMEs, the cost of lost opportunities actually took this figure up to £37.8bn!
Getting the right advice
Of course, businesses can do a lot to help themselves too. One of the reasons cited for not being able to take opportunities in the last 12 months was lack of marketing resource and cost. But marketing, doesn’t have to be complicated or expensive – especially online. It’s getting the right advice on where to invest in marketing that’s key.
And, whilst things are starting to look up for the economy, if time has taught us anything it’s that it we can’t be complacent. When times are good it’s the perfect opportunity to invest in a strong infrastructure; the skills, people and support that will see you through the future, whatever it holds.
Economic figures – they’re up, they’re down – but do they really make a difference to small business owners? It can often feel like they’re pretty academic. However, positive economic news can have a boost on business and consumer confidence.