Small and medium-sized enterprises (SMEs) in the UK have experienced an increase in turnover since 2019, according to Aldermore’s latest SME Growth Index.
On average, these businesses have seen their turnover grow by £327,304 over the past four years, with a substantial portion of this growth being reinvested into the companies to spur further expansion.
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The report indicates a 59% increase in the customer base for the average SME since 2019, with a 52% rise occurring in the last year alone.
Additionally, SMEs have expanded their workforce by 61% since 2019 to accommodate this growth.
Looking forward, SMEs plan to invest an average of £232,539 over the next 12 months in various growth strategies. This figure is 28% lower than the previous year’s planned investment of £321,048, likely due to the current economic pressures and geopolitical concerns.
SME leaders have outlined their primary objectives for the coming year, which include business growth (46%), customer base expansion (39%), and cost reduction (34%).
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By GlobalDataTo achieve these goals, one-third of the businesses are focusing on enhancing their online presence (32%), investing in staff training (32%), and purchasing new equipment (31%).
Medium-sized businesses are keen on adopting new technology (47%) amid the global AI boom to improve efficiencies and explore new opportunities.
Despite the growth trajectory, SMEs face significant challenges, with high inflation (34%) and energy costs (32%) identified as the top barriers over the next 12 months.
The rising cost of materials (27%) and high interest rates (24%) are also concerns that could potentially hinder future growth prospects.
Aldermore commercial director of asset finance Lee Rhodes said: “The last few years have proven tough for SMEs, with businesses having to face one hurdle after the next. Despite this, SMEs have shown themselves to be resilient, enjoying healthy financials and strong customer and headcount growth.
“While SMEs may be investing less than they did last year, it is encouraging to see businesses remain focused on enhancing and expanding their operations. While it may be uncharted territory for SME leaders who are scaling their business and unsure how to fund their growth, there are a number of business finance options available, which can help support them in this journey.”
