New research has found that optimism in the Big Smoke is running high as small business growth prospects prepare to sky-rocket. Revenues are looking to rise by a substantial average of 44% over the next decade and hit an impressive £528,000 by 2025. This equates to an increase of £162,000 so it comes as no surprise that business owners across the capital are looking smug.
Hope is pretty high up in the North too, albeit not quite as lofty as back down South. The study conducted by e-lending service, Everline and the Centre for Economic and Business Research (CEBR) found that businesses in London are looking forward to more than twice the turnover that business leaders in the North are expecting, with a fifth of businesses expecting no increase at all. However, London’s Northern counterparts are still set to enjoy a growth of 33%, or £65,000 to £263,000 over the same period.
Southern areas outside of London were revealed as the ones with the most pessimistic business leaders, with nearly a quarter predicting zero turnover by 2025. The average small business in this region is expecting a modest 33% growth, followed by 31% in the Midlands and 37% in Scotland.
If you’re working in media, marketing, PR or sales in London then you’re onto a winner because there are the sectors displaying most confidence for the next decade. Leaders in these areas are predicting a healthy 45% (£330.000) increase in turnover by 2025. Finance and accounting are set for great things as is IT & telecoms, with both sectors expecting a 43% increase.
Russell Gould of Everline, explains that with the average turnover of small businesses in the capital already more than 80 per cent higher than that of other regions, businesses in London could be set to move even further ahead, with revenues forecast to rise by about £162,000 by 2025 in comparison to the £82,000 increase expected across the UK in general.
He said: “This is particularly telling given the government’s commitment to devolving more powers to the regions and creating small business hubs outside of the capital.
“Although small business growth has increased dramatically in the last ten year, it’s clear from our Small Business Tracker that more needs to be done to encourage a similar decade of growth and instil confidence in our small business network, especially outside of London.”
Another interesting find revealed that only 36% of small business in the North are allocating financial resource to digital activities and plan to either reduce or keep this over the next decade. In London this figure only reaches 26%, with a further 10% looking to increase their digital spends when they acquire the adequate capital and skills.
Economist at the CEBR, Sam Alderson, said: “A few years ago small businesses could be forgiven for thinking that sophisticated technologies were only within the reach of larger corporations who could afford the up-front investments.
“However, while there is still more that can be done to reduce the costs, digital technologies are becoming increasingly accessible to small businesses. Given the multitude of benefits that technologies can bring, from shaving time off everyday tasks to broadening a customer base, more could be done to promote and support the uptake of digital technologies in the nation’s small businesses.”