Edinburgh SMEs optimistic about their future growth – Scottish Business News

RUNNING a small business in the UK is no easy task, however, the lingering effects of the recent recession are now starting to shrink and 2024 is seeing inflation drop to its lowest level in two years.

With this in mind, financial technology company SumUp surveyed 750 small UK business owners and decision makers within small UK businesses to see how confident they feel about the state of the current UK market, the challenges they are facing, and if their current confidence levels extend to future expectations.

Overall, Edinburgh small business owners and decision makers are optimistic about their future, with almost three-quarters (72%) of respondents saying that they are confident about their business, especially as the UK economy exits the technical recession it entered in 2023, expecting to overcome challenges. 

Whilst 11% of respondents remained neutral, neither expecting their business to grow or decline significantly, 5% said that although they have concerns they generally have a positive outlook in regards to their business.

Only 11% of those who took part in the survey said that they are worried about their business and expect there to be a lot of challenges to overcome. 

It appears that there are several challenges that Edinburgh SMEs are facing. A third (33%) of small business owners and decision makers said that the current economy and inflation rates for raw materials and stock were one of the main factors influencing their business confidence. Similarly, 28% of respondents said that cost of bulls and necessary investments such as energy, rent, or new machinery is a current challenge. 

Additionally, just under a third (28%) said that customer retention was getting tougher, along with staying on top of competition. Furthermore, 22% of those said that their competitors are offering cheaper alternatives. 

Other challenges that SMEs based in Edinburgh are facing include smaller profit margins (33%), finding and retaining employees 17%, and digital transformation (6%). 

One in nine (11%) said that they are facing no challenges at the moment. 

Edinburgh SMEs are taking several steps in order to overcome current challenges. Almost two-fifths (37%) said that they are lowering costs in order to help with customer retention, despite rising costs and smaller profit margins being a current challenge. 

Furthermore, a quarter (25%) of respondents said that they have worked on a cost-saving plan in regards to their supply chain and professional services, whilst 12.5% are working on a cost-saving plan to change their service providers for bills such as energy, gas, and Wi-Fi. 

Other changes that SMEs are taking include expanding their product or service offering in order to expand into new markets and tap into new consumer groups (25%), increased prices to help protect profit margins (12.5), and reworked their business so that it is more eco-friendly, resulting in lower energy costs (12.5%). 

A quarter (25%) of respondents said that they haven’t made any changes to help overcome current challenges. 

Corin Camenisch, Product Marketing Lead  at SumUp commented on the survey: “As champions for small merchants, we conducted this survey to discover the confidence levels of small business owners and decision makers in the UK to better understand the challenges they face, gauge their optimism about their future, and identify areas where support for SMEs might be needed. 

“Overall, confidence levels of small business owners and decision makers across the UK are high. This positive outlook suggests that small merchants are prepared to navigate potential uncertainties and continue to thrive. 

“We have provided tips off the back of our findings for those just starting out in business, or who are looking to deal with unexpected market fluctuations on our full campaign page.”

For more information and business advice, please visit the full campaign page here: https://www.sumup.com/en-gb/business-guide/uk-business-confidence-report-2024/