More than half of small to medium enterprises expect their turnover to increase over the year despite economic challenges.
Findings from the latest Azets SME Barometer, compiled by Top 10 accountancy firm Azets, are likely to resonate with businesses in the Solent region.
“Despite gloomy economic headlines, many firms appear to be relatively bullish about future prospects,” said Adam Wilson, regional managing partner for Azets’ Solent offices in Chandler’s Ford, Fareham, Romsey, Winchester and Havant, near Portsmouth.
“Like our preceding Barometer, the findings once again demonstrate the strength and resilience of local businesses.”
Azets surveyed nearly 1,100 clients in the UK and Nordic countries and, according to the report, 62% expected their turnover to increase in the next 12 months.
Business models, digitalisation and the economy represent the “biggest opportunities”.
More than half (54%) say they will increase digitalisation in the year ahead, with cyber-security, data analytics, remote working, e-commerce and process automation ranking as top priorities.
On the flip side, cost inflation is the largest day-to-day worry, along with recruitment – two-thirds find hiring the right people with the right skills challenging.
On the environmental front, nearly three-quarters are not focused on reducing carbon footprints.
Just under half of respondents confirmed they do not have the competencies to address ESG – environmental, social and governance – to safeguard their businesses from future risks.
Expertise, time, cost and supply chain due diligence are among the biggest challenges in relation to ESG.
Covid-19 remains a major threat, from staffing to supply chain issues, and 16% of SMEs in the UK have experienced a cyber-attack or serious data breach.
The findings were collated before the Russian invasion of Ukraine.
Adam said: “Despite the understandable negative sentiment and economic optimism dropping from our previous and first Barometer, it is clear from our latest Barometer that 62% expect their turnover to increase, with 53% forecasting improved profits.
“Marked by another year of the pandemic and its associated effects, and the harrowing Ukraine crisis, business leaders continue to remain stoic, pivoting their business models and proving why they continue to be the backbone of our economies.”
Other challenges for companies were also referenced, such as price fluctuations on commodities, due to the international situation, and global supply chain disruptions.
According to official figures, the UK has 5.5m firms employing up to 49 staff and a further 35,600 companies employing between 50 and 249 people.
Azets is the UK’s largest regional accountancy and specialist business advisor to SMEs.
The firm recently acquired award-winning business and tax advisory firm Inspire Accountants, an independent firm based in Poole, Dorset; the acquisition strengthens Azets’ established presence on the South Coast.
In a separate development, an HR consultancy service for businesses across the region has been launched by Azets.
