After a challenging 12-months, small businesses resilience has not wavered as we start a New Year. Nationally, 83% of small firms say they have a fresh set of goals in place to secure the growth for the year ahead.
Our study found that while intent to secure growth is consistent with levels recorded 12-months ago, plans on how to achieve it have changed.
For 2021, small businesses have prioritised plans to focus on their finances and save money in order to reduce the impact of continued uncertainty. Almost a third of survey respondents (31%) said they were planning to strengthen their business by keeping fixed costs down compared to 26% in January 2020.
Further, more than a quarter of small business owners said they were working to build up their financial reserves.
In addition to saving money, January 2021 saw a rise in the proportion of small businesses that were actively putting in place contingency plans in the event of prolonged market volatility (rising from 15% in 2020 to 21% in January 2021).
We found that the most adaptable sectors for the start of 2021 were manufacturing and retail.
In the manufacturing sector, small business owners were most likely to be focusing on increasing new business income and sales in order to grow. In retail, small businesses were most likely to say they were doing what they could to diversify the business and offer new lines of services.
(The research was conducted by YouGov on behalf of Hitachi Capital Business Finance among a nationally representative sample of 1,039 small business in January 2021)