UK businesses are significantly changing the way they strive for growth, with SMEs changing their focus from tighter management of financials to a heavier focus on diversifying their business and looking towards new markets to achieve growth. The latest findings from Hitachi Capital’s quarterly British Business Barometer, found over one in four (28%) SMEs are now looking to alternative markets to achieve growth, a 13% increase on six months ago and an 8% increase on Q4 2014.
While the constant strain of red tape, regulation and ‘fixed costs’ placed on UK businesses is well documented, Hitachi’s research suggests that businesses are slowly waking up to the realisation that too narrow a focus on the financial aspects of running a business will ultimately restrict growth.
While keeping fixed costs down is still the most significant barrier to growth for over one in two businesses (53%), the change by quarter in the number of businesses looking to new markets is perhaps indicative of the need for a more strategic approach to growth. In a further indication that businesses are looking to the future, over two in five (22%) businesses will be looking to hire more people in the next three months to achieve growth, a 6% increase on 6 month ago (16% Q1 2015). Furthermore, 20% of SMEs will be looking to further support expansion by investing in new equipment for the business, a 7% increase on Q1 2015.
The research from Hitachi Capital Business Finance’s quarterly British Business Barometer, asked 1,000 small businesses in the UK, what they are doing to try to achieve business growth in the next three months compared with Q1 2015 and Q4 2014.