Short-term future looks bright

By JO THORNHILL
Updated:

 

SMALL businesses planning to expand outnumber those that are downsizing by 10 to one - or 41% to 4%, according to research from Alliance & Leicester Business Banking.

'Our latest findings support recent industry figures on house prices and consumer spending in suggesting that there is a broad-based confidence in the country's economic outlook,' says Gareth Williams, head of marketing at Alliance & Leicester Business Banking.

'Despite fears to the contrary, there is little to suggest that small business owners are preparing to hang their boots up for World Cup month this June.'

However, figures published last week by the Bank of England show that potential entrepreneurs do not have such an optimistic outlook.

The number of new start-ups fell in 2001, the first time since 1996, according to the BoE's latest small firms finance report

But A&L's survey shows that at least for those in business, the short-term future does look rosy.

The A&L Business Barometer asked a representative sample of 500 small business owners what they felt the outlook was for their business in the next three months.

Despite a turbulent economic climate over the last nine months, small business confidence has continued to rise quarter on quarter.

More than two in five small business owners (41%) said they planned to expand their business in the next three months, a rise from 35% in July 2001 and a marginal increase from 40% in November 2001.

The proportion of people intending to sell their businesses to make money has fallen from 12% in November last year, to 7% - having more than doubled between July and November 2001.

And the number of small businesses which will have to sell up has also fallen. A&L's research found that just one in 14 small business owners is planning a work-break.

This trend was most prevalent among smaller enterprises (those with a turnover of up to £30,000 per annum), with one in seven (13%) planning a break in the next three months - a rise from 6% in November 2001 and 2% in July 2001.

Overall, market confidence amongst small business owners remains high, with only 2% of the total sample expecting to sell up at a loss.

Start-ups shrink

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