UK small and medium sized businesses (SMEs) confidence has dropped significantly this quarter, with the self-employed feeling particularly pessimistic about their prospects in the coming months.
According to the latest Federation of Small Businesses’ (FSB) Small Business Index (SBI), fewer than one in three (29 per cent) of SMEs expect their performance will improve over the next quarter.
The UK confidence measure fell to -1.7 in July, making the third negative reading since the EU referendum in Q3 2016. The SBI has not returned to the level seen in Q4 2015 (+21.7) at any point since.
Confidence among the self-employed has fallen to an all-time low of -18.4, and 27 per cent of SME exporters reported falling international sales in Q3 2018, up from 19% in Q3 2017.
Firms in the retail sector remain the least confident, reporting an SBI of -42. Four in ten (43 per cent) expect performance will worsen in Q4 of this year. Only one in six (16%) believe performance will improve.
Despite this clear concern ahead of Brexit, only one in seven (14 per cent) SMEs have started planning for a no-deal Brexit.
In order to survive and thrive in this challenging environment, UK SMEs should review their business strategies and put in place plans to enable them to adapt quickly to the changing economic and operating conditions.
Business owners and managers must be aware of income and expenditure by keeping proper records and monitoring trends and patterns. Profit and loss accounts will help you understand how your business is progressing, as well as alert you to any potential issues which might arise, giving you ample warning to rectify the problems or make the necessary adjustments to keep your business on track and successful.
At Beavis Morgan, our specialists to SMEs are available to provide general business advice and to structure your business for tax. We can also assist with business plans and strategy execution, long and short term forecasts, budgets, sensitivity analysis, and calculating and checking compliance with covenants.
Contact Steve Govey or your usual Beavis Morgan Partner for further information about how we can assist you and your business.
Read more: 5 key factors to successful strategic planning and execution ahead of Brexit