Confidence levels amongst small and mid-sized businesses (SMBs) have increased globally, with 79% in the UK expecting to return to pre-pandemic profitability in the next 12 months.
According to a global study from Sage, 81% of global SMBs have reported increased confidence and 43% are expecting to hire more people in 2022.
However, 23% of businesses said increasing costs, such as inflation, wage and rent increases, pose the biggest risk to their business looking ahead to the next 12 months.
Rising costs, the need for greater government support and better financing options to weather the conditions over the next 12 months are reportedly the major concerns for more than 60 million businesses globally, and nearly a quarter of UK SMBs.
Additionally, 20% report reduced customer demand as one of their biggest concerns today.
However, 68% of business decision makers reportedly feel confident their business will be successful in the next 12 months, in line with 69% of SMBs globally. Overall, 79% of UK SMBs expect to be somewhat back to pre-pandemic levels of profitability.
Approximately 43% expect an increase in revenue in the next six months, and 69% expect their revenue to increase by up to 30%. Meanwhile, 41% expect their customer base to grow in the next 12 months and 48% expect their workforce to increase by up to 20%, leading to the creation of more than 321,000 jobs in the UK over the year.
Sage also revealed that over one-third of UK SMBs are still not operating normally due to pandemic, with around 650,000 businesses at “urgent risk” of going out of business, putting 1.1 million jobs in danger.
Steve Hare, Sage Group CEO, said: “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.”