Small businesses thrive despite threat of inflation
Business leaders across the UK continue to face the threat of inflation. Recent studies show that 97% of small business owners are worried about inflation and say rising costs are the most significant threat their business faces. Small businesses have experienced an abundance of price rises, from energy and fuel costs to raw materials and wages. However, as we have seen previously in response to the pandemic, small businesses in the UK are resilient and are well-positioned to overcome challenges through innovation. The unfaltering ambition of many business leaders across the UK is inspiring, and despite the unwelcomed challenge of inflation, will continue to drive the growth of the UK economy this year and beyond.
One of the most impressive facets to the UK ‘s private sector is its dynamic small business landscape. SMEs throughout the UK saw impressive growth throughout 2021 and have continued this momentum into 2022 with 56.2% of SMEs reporting a rise in earnings in the last quarter of 2021 versus the same period of 2020. The small business eco-system is predicted to be a ‘boom’ sector throughout 2022 for UK business with UK SMEs looking to drive employment and investment numbers with 58% of SMEs predicting an increase in revenue this quarter compared to last year.
With 16% of UK investors looking to back start-ups and newly formed businesses it seems they will be given a platform to continue the success and progression of their companies throughout 2022. The community and investors are ready to back small businesses and small businesses are ready to maximise this exciting opportunity. It seems to be an exciting time for small businesses in the UK and it poses an exciting, alternative investment prospect for investors.
SME investing can represent an exciting opportunity for UK investors, providing them with tax benefits and a realistic chance to maximise their returns. In 2021 there were a record 319,000 new businesses registered in the UK, with the number of small businesses in the UK now standing at 5.5 million, with recent research showing that two-thirds of the UK workforce want to start their own company. This shows a continued desire, caused by the pandemic, for individuals to start a business of their own in the UK.
SMEs are set to drive employment and investing throughout 2022 – with nearly half of UK SMEs looking to hire new employees after a promising start to 2022 and UK investors ready to back start-ups and newly formed businesses SMEs are ready to make 2022 an impressive year and grow as much as possible throughout the year. The EIS could also be an important trend throughout 2022. The EIS can be said to offer a win-win situation for both investors and small businesses – providing SMEs with much-needed investment to provide them with a platform to grow, whilst providing investors with tax reliefs to incentivise this investment. Small businesses and SMEs throughout the UK have benefitted enormously from the EIS in the last 25 years, fuelling growth and job creation at an impressive scale.