A recent survey conducted among 610 entrepreneurs across twelve UK regions has highlighted the significant challenges faced by small and medium-sized enterprises (SMEs) amid a turbulent economic climate.
The report, introduced by Kevin Hollinrake, Shadow Secretary for Business and Trade, at a House of Lords reception, reveals that 44% of UK businesses have faced potential closure this year. This dire statistic underscores broader struggles within the SME sector, including difficulties in accessing financial support reported by half of the respondents and concerns over high taxes cited by 65% of business leaders. High taxes were deemed the largest single obstacle to business growth (14%), closely followed by input costs (13%), difficulties accessing finance (11%), hiring challenges (9%), government bureaucracy (8%), premises costs (7%), and regulatory burdens (7%).
Nevertheless, founders remain optimistic about the future. The report indicates that 60% of entrepreneurs expect revenue growth, while 57% anticipate a rise in consumer demand. Nearly half (45%) foresee an increase in staff numbers, and 49% are targeting growth over stability. This optimism reflects a broader belief that key drivers of business success will improve in the coming year.
Warren Mead, CEO of Sumer, emphasised the critical role of SMEs in their communities, stating, “Our study makes for some uncomfortable reading, especially when considering the knock-on effect of even one small business going under in a community. These organisations are embedded within the fabric of their local areas, providing much-needed employment, a sense of pride in place, as well as a route for social mobility.”
Regional pride emerged as a notable theme, with 89% of business leaders believing companies can achieve their full potential outside London. However, economic inequality between UK regions remains a significant concern, with many areas suffering from under-investment, skills shortages, and economic stagnation. Entrepreneurs overwhelmingly agree that Greater London receives preferential treatment, calling for government action to reduce these disparities.
The report outlines several key policy recommendations to support UK SMEs and foster a balanced economic landscape: maintaining competitive business taxes, reforming Capital Gains Tax, making Business Rates fairer, investing in infrastructure, and streamlining the planning process to support development. It also suggests exploring alternative financing methods for construction, increasing the supply of business premises by liberalising development regulations, expanding mayoral devolution, and considering devolving more fiscal powers from Whitehall.
Eamonn Ives, Research Director at The Entrepreneurs Network, accentuated the necessity of government action, stating, “If the new Government is to make good on its promise to restore meaningful growth to every corner of the nation, it cannot ignore the role the private sector plays in delivering jobs and opportunities. Entrepreneurs don’t tend to wait around for a hand up, but that’s not to say there aren’t things the Government can do to make their lives easier.”
As the UK faces ongoing economic challenges, the United Growth Report serves as a crucial call to action for policymakers. It highlights the urgent need for targeted reforms and investments to support the nation’s entrepreneurs and ensure sustainable growth across all regions.