Deloitte Survey Reveals Optimism
The UK’s entrepreneurs performed well last year and are optimistic about their future prospects, despite the current economic instability, according to research by Deloitte.
The firm’s survey of nearly 500 entrepreneurs from across the UK found 57% reporting revenue growth in line with, or outperforming, their projections for the year. While 37% saw their revenue fall below their ambitious forecasts, only 16% fell significantly short of their revenue targets.
For the second year in a row, nine out of 10 entrepreneurs expect to grow their business over the coming 12 months, with half (53%) anticipating double-digit growth and 38% a maximum of 10%. In the longer term, 90% forecast double-digit cumulative revenue growth for their business over the next three years and 38% are projecting growth to exceed 50%.
A third of entrepreneurs (34%) say organic growth will be their main growth strategy over the next 12 months, up from a quarter (25%) the previous year. The appetite for mergers and acquisitions has dropped from 6% to 4% currently and fewer are considering entering into a strategic alliance or collaborative project (down to 8% from 11%).
Over half (54%) of entrepreneurs polled say they will use cash generated from their business as the most likely source to grow, while just a fifth will source it from a bank. According to the survey, 42% still describe their attitude to cash as ‘actively stockpiling’ and retaining cash within the business.
Tony Cohen, head of entrepreneurial business at Deloitte, said: ‘It is telling that a large proportion of entrepreneurial businesses are still stockpiling cash and nearly a quarter are saying they do not use bank financing for the growth of their business. As a group, entrepreneurs feel better served by banks than in the last few years, though frustrations remain for a large minority.’
The survey identified expanding into new markets (17%), introducing new products or services (17%) and increasing productivity (16%) as the three key business strategy priorities for entrepreneurs over the next 12 months.