More than 80% of UK small businesses are planning growth-focused initiatives for 2025, reflecting increased optimism as companies announced their highest level of growth forecasts in two years, according to a study by Novuna Business Finance.
Key areas of focus include boosting new business sales (43%) and reducing fixed costs (24%). Diversifying business models and developing new products or services are top priorities for one in five companies. However, recent National Insurance changes appear to have tempered recruitment ambitions, with only 7% of SMEs prioritizing senior appointments and 9% planning to hire young talent.
Regionally, London leads the charge, with 94% of companies prioritizing growth, followed by the West Midlands and the North East at 83% each. Sectors such as media (92%) and manufacturing (90%) are more likely to focus on growth initiatives, highlighting the strong momentum in these industries.
These results come as 35% of small businesses nationally reported growth in the past three months, the highest number in two years. Despite concerns surrounding the fall budget, many SMEs are ending 2024 on a strong note.
Joanna Morris, head of insight at Novuna Business Finance, said: “The proportion of businesses anticipating growth has reached a two-year high since July. A significant proportion are already prioritizing growth projects for next year. We are committed to helping businesses realize their potential and building on renewed confidence.” Which we saw this year.
Financial prudence remains a key theme, as companies aim to address fixed costs and build financial reserves as part of their strategy to ensure resilience in a dynamic economic environment.
The study highlights the determination of UK small businesses to move forward, positioning themselves for sustainable success in 2025 and beyond.