Sage : 'Toughened-up' British businesses emerge post-pandemic according to new Sage study

• Confidence levels are high amongst small and mid-sized businesses (SMBs) globally, with 79% in the UK expecting to return to pre-pandemic profitability in the next 12 months vs 81% globally, and 43% expecting to hire more people in 2022
• But challenges remain - increasing costs are the major concern for more than 60 million businesses around the world, and nearly a quarter of UK SMBs
• Over one-third of UK SMBs still not operating normally due to pandemic, with around 10% (650,000 businesses) at urgent risk of going out of business, putting 1.1 million jobs in danger
• Sage calls on UK Government to futureproof the success of SMBs by keeping them at the forefront of decision-making, supercharging initiatives like Help to Grow: Digital and putting them at the heart of the levelling up agenda

Newcastle, 28 February - British businesses have emerged from the pandemic toughened up and ready to face the future, according to a landmark global study from Sage, the leader in accounting, financial, HR and payroll technology for small and mid-sized businesses (SMBs).

Sage's Small Business, Big Opportunity? report uncovers how SMBs - which represent 61% of UK jobs and 52% of UK turnover* - are surviving and thriving despite current public health, economic and societal challenges. However, they warn of rising costs and the need for greater government support and better financing options to weather the conditions over the next twelve months.

Sage Group CEO Steve Hare commented, "SMBs have demonstrated incredible resilience throughout the pandemic. But their confidence cannot be mistaken for invincibility. The government must do more to safeguard their prosperity against a backdrop of continued uncertainty and rising costs - or we risk forcing them to choose between protecting people or protecting profits. Overlooking smaller businesses endangers the recovery, thousands of UK jobs and the success of the government's levelling agenda; we all have a role to play in futureproofing their success."

Sage commissioned the study to look at the confidence of SMBs, surveying over 2,000 businesses in the UK (and over 13,000 globally) to understand their experience of enduring the Covid-19 pandemic and their outlook for the future.

The research found:

• Rising costs and concerns about inflation are keeping UK businesses up at night with nearly a quarter (23%) saying increases in costs (e.g., inflation, wage and rent increases) pose the biggest risk to their business looking ahead to the next 12 months. The same number cite this as the biggest negative impact on their businesses today while 43% anticipate cost pressure will increase in the next twelve months. One third are concerned about reduced consumer spending, with 20% saying reduced customer demand is one of their biggest concerns today.
• However, UK business confidence remains strong, despite - and even because of - ongoing pandemic pressures. Most UK businesses feel more resilient and better prepared to overcome major barriers now than before the pandemic because of the adaptations they have made over the period. 68% of business decision makers feel confident their business will be successful 12 months from now, in line with SMBs globally (69%). This optimism is starting to filter through into profitability, with 79% of UK SMBs expecting to be at least somewhat back to pre-pandemic levels of profitability. As many as 43% expect an increase in revenue in the next six months - and 69% of them expect their revenue to increase by up to 30%. 41% expect their customer base to grow in the next 12 months.
• UK SMBs expect to increase hiring and remain optimistic about staffing over the next twelve months. 43% of businesses surveyed expect to hire more people in 2022, and around half of them (48%) expect their workforce to increase by up to 20%, leading to the creation of more than 321,000 jobs in the UK over this period alone. 30% of UK SMBs saw their workforce shrink in the previous year but 66% are confident that they will be able to meet their staffing needs over the next 12 months.
• Government and financial support are crucial to business survival, with 43% of UK SMBs relying on external financial support to cope over the last 12 months, and one in five highlighting a lack of government support as the key challenge over the last twelve months. Government support is identified as the single most important resource to contribute to SMB growth over next 12 months, although 30% fear that access to government support will worsen over that time. Financing, including bank loans and grants (20%) and better management of cash flow (22%) also noted as key factors to success.
• Investing in technology proved crucial during the pandemic as a majority of businesses relied on technology to survive. 56% of businesses became more reliant on technology as a result of the pandemic, while around a fifth of SMBs adopted new technology to operate better and / or to sell more to customers during the pandemic. This is set to increase in the future, with 44% expecting to invest more in technology over the next 12 months, and a third seeing investing in technology as key to becoming more profitable and to saving valuable time.

* Source: Business population estimates for the UK and regions 2020: statistical release

-ENDS-

Methodology

Portland Communications' specialist research team conducted an online survey involving 13,118 SMB decision makers between Thursday 25 November and Thursday 2 December 2021. The markets included as part of this study are in the UK, USA, France, Spain, Germany, Canada, Australia, South Africa, Portugal, Malaysia, and Singapore. In each market, decision makers at businesses employing fewer than 250 people were targeted.

The sample included a diverse range of SMB decision makers globally, with the sample size for each market being as follows:

Portland Communications' specialist research team conducted an online survey involving 13,118 SMB decision makers between Thursday 25 November and Thursday 2 December 2021. The markets included as part of this study are in the UK, USA, France, Spain, Germany, Canada, Australia, South Africa, Portugal, Malaysia, and Singapore. In each market, decision makers at businesses employing fewer than 250 people were targeted.

The sample included a diverse range of SMB decision makers globally, with the sample size for each market being as follows:

Country	Sample size
UK	2,040
USA	2,034
France	1,082
Spain	1,057
Germany	1,039
Canada	1,087
Australia	1,079
South Africa	1,056
Portugal	1,046
Malaysia	1,070
Singapore	528

Portland Communications' online polling studies are accredited by the British Polling Council. All data gathered is of a publishable quality.

About Sage Group

Sage exists to knock down barriers so everyone can thrive, starting with the millions of Small and Mid Sized Businesses served by us, our partners and accountants. Customers trust our finance, HR and payroll software to make work and money flow. By digitising business processes and relationships with customers, suppliers, employees, banks and governments, our digital network connects SMBs, removing friction and delivering insights. Knocking down barriers also means we use our time, technology and experience to tackle digital inequality, economic inequality and the climate crisis.