Seven in ten North West micro-businesses expect activity levels to bounce back over the next 12 months as consumer demand rises, according to new research into one of the most important parts of the UK economy.
Shawbrook Bank’s Micro Business Monitor surveyed* UK businesses with 25 employees or fewer – known as the backbone of the economy – in a bid to understand the opportunities and challenges that lie ahead for more than 5.7million firms in the UK.
Three quarters of North West micro-businesses believe increasing consumer demand will be key to their success, followed by 60% that plan to diversify or introduce new revenue streams.
More than two fifths also intend to hire additional full-time or part-time employees in the next six to 12 months. Almost a third plan to invest in digital, technology or automation while 27% are planning to target new sectors.
Almost six out of ten businesses surveyed had seen demand for their products or services increase since the start of the pandemic, while just 7% said demand had significantly decreased.
Those who said demand had dropped blamed the pause in trading during lockdown (57%) and falling consumer demand (50%).
Alun Williams, Commercial Director of Savings at Shawbrook Bank, said: “It’s extremely encouraging to see micro-businesses across the North West have a positive outlook for the next 12 months, a reflection of the agility that allows them to adapt more easily to external factors. However, in the short-term, micro-businesses need to think about upcoming opportunities or challenges and how they will be funded.
“Many firms have experienced huge changes over the past 18 months but have learned to adapt or innovate and are now in a position to expand their offering. Having the availability of business savings will help these firms invest in their future, create new jobs, or upskill staff.
“I’d urge any business to include savings as part of their long-term strategy and planning as having this pot of money can provide great reassurance, which after recent headwinds, can only be a good thing.”
More than half of North West micro-businesses know exactly where every penny is coming from and going to, while 75% already have a business savings account in place. According to this research, the North West has the highest level of micro-businesses with dedicated savings accounts, outside of London
A third of those with savings pots plan to use them towards introducing new training for employees, followed by 28% who will use savings for protection against future disruption.
More than half say having a business account in place gives them the confidence needed to operate successfully.
Looking forward, 89% expect their business to grow over the next six to 12 months with two thirdsplanning to use their savings to expand their business offering and 62% planning to explore new revenue streams.
Glendale Creative, a full-service design and marketing agency, decided to pivot its business after live events and conferences were cancelled during lockdown.
The firm used its business savings pot to train colleagues to meet changing demand for digital creative briefs and invested in new IT and security infrastructure to support staff working from home.
Sara Garvey, Finance Director at Glendale Creative, said: “When COVID-19 struck, the desire for many of our in-person services disappeared. This forced us to pivot and focus on developing the digital side of our business. The requirement for all sorts of digital assets – from coding to voice overs – intensified.
“As businesses developed new ways to communicate with their staff beyond traditional email, the requests for video also increased significantly. Our clients wanted to share their latest strategies, policies, and updated systems to their customers and homeworking staff in the most innovative way – to not only grab their attention but also maintain it. Thanks to our savings built with Shawbrook, and the nature of the account we had with them, we were in a solid position to react quickly.”