Optimism among the UK’s small and medium-sized businesses has grown for a third consecutive year, according to new American Express research, with almost seven in 10 (69%) saying they are confident about the future of their company — rising from 67% in 2023 and 65% in 2022.
The most significant uptick in optimism was among micro enterprises (those with between 1-9 employees), with 67% feeling confident this year, compared to 62% in 2023. Sole traders are also feeling more upbeat than this time last year too (52%), an increase of 3 percentage points on confidence levels compared to 2023 (49%).
The findings of the annual Barometer survey of decision makers at 1,000 UK micro, small and medium sized businesses and sole traders, conducted in partnership with Small Business Saturday UK, reveal that almost three-quarters (71%) of SME leaders feel their business is currently in good shape, an uplift of 5 percentage points since 2022.
This rise in optimism is fueling a growth mindset, as over half (52%) of respondents are planning to invest more over the next 12 months to grow their business. Business leaders are also committed to bolstering their customer offer, with 54% looking to improve communication with customers, 42% providing additional services and 33% planning to launch more special offers.
At the same time, SME businesses believe their customers are now less focused on price when deciding what to spend on; in 2023 57% of respondents felt customers were driven by price above all else, compared to 51% this year.
There are also encouraging signs when looking ahead to the remainder of the year; almost three-fifths of respondents (57%) believe sales will be better in Q4 2024 when compared to the same period across the previous two years.
Amanda Salt, Vice President, Small & Medium Enterprises, UK Card Services at American Express, said:“It’s incredibly positive that more SME businesses are feeling confident about the future. While it remains a challenging landscape, business owners continue to show remarkable resilience as they focus on growth and delivering for their customers. At American Express our focus will always be on backing these businesses, helping them go from strength to strength with a tailored suite of products designed to meet their needs.”
Michelle Ovens, Director of Small Business Saturday UK, added:“The rise in small business confidence this year is encouraging, as small firms recover after an economically difficult few years and capitalise on many available opportunities to grow. We are extremely excited to run Small Business Saturday for its twelfth year in the UK with support from American Express, to champion the nation’s 5.5 million small businesses, who are at the heart of both their communities and the whole UK economy.”
The survey also asked about respondents’ views on Artificial Intelligence (AI) and its role in their business. Almost half (45%) of all respondents plan to implement AI-led solutions into their businesses over the next year. This is most likely amongst medium-sized businesses (64%), though almost a third (30%) of sole traders are also planning to introduce it – for reasons such as making their accounting processes more efficient (34%) and improving supply chain operations (25%).
Of those already using, or planning to use AI, almost half (49%) say it helps supports marketing activity, the same proportion (49%) to aid content development, and 36% to improve customer service.
