Sharp increase in percentage of Scottish small businesses anticipating growth
Thursday 5th December 2024
Percentage of Scottish small businesses anticipating growth rises from 27% to 34%
New data from Novuna Business Finance reveals Scottish small businesses are showing renewed confidence as enterprises recover from recent economic challenges.
The survey, which gathered responses from over 1,000 small business owners across the UK, found that 34% of Scottish small businesses expected to grow over the next three months - a rise from 27% on the previous quarter. This marks the highest level since Q3 2023 and brings Scotland broadly in line with the national average of 35%.
Meanwhile, the number of Scottish small businesses expecting contraction or scaling down has fallen to just 7%, down from 11% in the last quarter - the lowest figure across any UK region.
This rise in confidence this quarter mirrors the pattern seen more broadly across the UK, and is explored in detail in a new report, published this week by Novuna Business Finance called ‘Growth Outlook in 2024: Tracking Small Business Confidence Over Time.’
Two thirds of Scottish small businesses exploring new growth initiatives
The research also suggests that this renewed confidence was influencing plans for the future, with two thirds of Scottish business owners (67%) considering it a good time to invest time and money into specific projects that would deliver further growth in the months ahead.
Looking at specific growth initiatives, the survey revealed that controlling costs was the top priority for Scottish small businesses. Among those with plans for growth, 48% were focused on reducing fixed costs to strengthen financial stability and resilience.
Hiring more staff ranked next, with 25% of businesses planning to expand their workforce. This represented a 5% increase from last year and was 3% higher than the national average. After London, Scotland had the highest proportion of businesses considering new hires. There was also a sharp rise in businesses aiming to enter new markets abroad, with 19% of business leaders planning overseas expansion—an 8% year-on-year increase in this area.
Investment in new equipment was also high on the list of priorities, with 22% of small businesses considering this option, broadly in line with the national average of 23%.
The challenges of recent years have undoubtedly tested the resilience of Scottish small businesses, but we are now seeing clear signs of recovery and renewed optimism. Confidence is returning, with a 12-month peak in terms of the number of Scottish small businesses expecting growth this quarter - and many more are laying the groundwork for future success. Despite the economic headwinds, Scottish businesses are proving adaptable and this quarter marks a turning point, with more businesses planning to invest in new equipment, expand into overseas markets, and create jobs.
At Novuna Business Finance, we understand that financial resilience is crucial in navigating these times, and we are committed to providing the support and solutions small businesses need to thrive and reach their full potential.
Jo Morris
Head of Insight
Novuna Business Finance
Scottish business outlook - the proportion predicting growth in the next three months vs national average
Specific growth plans
Scottish small businesses | National average | Change in last 6 months (+/-) | Change in last 12 months (+/-) | |
Improving cash flow | 19% | 33% | -9% | -10% |
Being stricter with getting paid on time (e.g. from clients) | 13% | 24% | -21% | -6% |
Keeping fixed costs down | 48% | 52% | -8% | -18% |
Securing financing to replace a vital business asset(s) | 0% | 6% | -5% | -2% |
Investing in new equipment | 22% | 23% | 2% | -1% |
Streamlining supply chain | 9% | 10% | 5% | 0% |
Seeking financial funding via a partner/ company other than our bank | 3% | 10% | -3% | -12% |
Moving to a different location/ bigger office | 9% | 7% | 8% | -4% |
Expanding into new markets/ overseas | 19% | 22% | -1% | 8% |
Reassessing finance commitments | 6% | 14% | -9% | -5% |
Hiring more people | 25% | 22% | 8% | 5% |