Small business growth goals
Here’s how small business owners and decision makers plan to grow, manage challenges and fund expansion.
The latest SME sentiment research from YouGov, commissioned by Prospa and released in April 2023, asked 511 small business owners and primary decision makers about the health of their businesses, their growth outlook and more.*
Here’s a round-up of how those business leaders plan to grow their business, face up to market challenges and access funding to help fuel progress over the next 12 months.
Growth goals
Small business owners and decision makers started the year in good spirits, with 32% rating the overall health of their business as very good. That’s a statistically significant increase from the previous round of research, released in January 2023, when just 26% rated their business’s health as very good.
In further good news, the number of business owners rating their business’s health as poor in the current environment has decreased – 26%, compared to 29% in January.
Business owners’ confidence in expanding or growing their business across the coming months has not wavered since the start of the year – the same proportion, 83%, anticipate growth for their business over the next 12 months.
Interestingly, 8% cite expanding to overseas markets as a projected source of growth over the next 12 months – that’s up from 5% in January.
Ask yourself:
- What are your goals and intentions for your business over the next 12 months?
- In what ways could you grow your business – could that include hiring new staff, expanding into a new market, or buying new stock?
How others did it:
Tristan Wright has first-hand experience of turning around negative cash flow, having started a custom cycling wear business in his early 20s.
“My prices were too low and the cost of materials too high, so the first step was to adjust my pricing, and the second step was to engage additional suppliers so I had redundancies in place and different price points,” he says.
Concerns and challenges
At the same time, the challenges faced by small business owners are front of mind and influencing the decisions they make.
According to the SME sentiment research, 88% of business owners anticipate major concerns or challenges for their business over the next 12 months. Of those, the top three are:
- Declining customer spending
- Higher inflation
- Increased operating costs
Declining customer spending was a new option added to the questionnaire for this round, and 33% of respondents listed it as their top concern.
Owners said that strategies to adapt to change and face up to current challenging include:
- Adjusting pricing
- Upskilling / training staff
- Reducing their own pay
Ask yourself:
- What are the biggest barriers to growth for your business?
- What actions could you take to navigate those barriers?
How others did it:
Tom White of Discount Lighting experienced price increases from suppliers twice in 12 months, but took action to adjust to this change.
“We are holding higher levels of stock of certain light fittings to achieve lower bulk pricing,” he says. “We’ve also reached out and directly negotiated lower prices with some suppliers.
“We are also working with suppliers to ship products that we don’t need to hold at our store directly from their warehouses to our customers to avoid doubling up on freight costs.”
The role of external funding
The third major component of the research relates to the role of external funding in business owners’ growth plans, with 30% expecting to access external funds over the next 12 months to support their business’s needs.
Of those who plan to access external funding, 71% say they plan to fund general business growth or expansion, up from 64% in January 2023. And 31% expect to do so for staff-related purposes such as hiring or training.
Ask yourself:
- How could external funding help fuel your business’s growth, or assist when adapting to changes in the current environment?
- What have you always dreamed of doing with or for your business that external funding could help you achieve?
How others did it:
A Prospa Small Business Loan helped Kate Symons and Chris Thompson of Fish out of Water to open a dedicated storefront for their popular house-made desserts and to employ four new staff.
*Prospa x YouGov SME Sentiment survey, April 2023
Talk with a Prospa specialist about how a Prospa Business Line of Credit could help boost your business’s growth.
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