News > Financial News > Wilson Partners releases results of its eighth biannual business report of South East SMEs
Business people alongside a performance chart depicting ups and downs and looking to the future
8 February 2024

Wilson Partners releases results of its eighth biannual business report of South East SMEs

Wilson Partners conducts a biannual business survey among SME clients in January and July. The research is carried out across a broad range of businesses across the South East of England through our Maidenhead, Cambridge and Sevenoaks offices. We opened up the survey to our own client base, consisting of approx. 1000 owner managed businesses, predominantly SMEs with 5-150 employees as well as a select few businesses of a similar DNA.

This is our eighth survey since Summer 2020, and as we continue through the most erratic financial period in recent history we have learned that whilst the outlook remains unpredictable, many businesses in the South East continue to adapt and improve, making the most of the opportunities that are out there.

More of the same, but positive signs are there
The confidence barometer has shifted 4pts to the good, sitting at 68 and bang in the middle of the low and high of the past two years, it suggests that not much has changed, but drilling into the detail a little more, some positive signs are emerging around the impact of lower inflation, stable interest rates and an improving labour market with the number of businesses increasing salaries by over 5% reduced from 52% last year to 29% suggesting the pressure around recruitment is easing.
There were a good number of businesses posting confidence levels in the 90s demonstrating that opportunities for strong growth are still very much there.

You can download our survey here

Stability is returning
Equal to July’s survey 68% of businesses have seen turnover increase with 58% seeing a rise in profits as well. Whilst it’s good to see this consistency, just 10% reported profit erosion versus 25% back in July 23 – a further sign that as inflation stability returns, the ability to manage pricing and profits comes with it. Indeed 25% of respondents are already seeing reduced inflation having a positive impact on their business.

Cash flow improving
84% are seeing cashflow either the same or improving with 16% seeing it worse than 12 months ago, this is an improvement on results from July 23, and great to see clients keeping it a top priority.

Opportunities with existing customers and AI starting to make an impact
A very encouraging sign is that almost 60% are seeing their biggest opportunity with existing customers – meaning that those customers are not only in good shape but suggesting that stronger relationships are being forged. 25% are increasing their sales and marketing activity to create opportunities whilst 20% see AI as one of the biggest opportunities although less than 10% have made significant changes to their business model to incorporate AI.

Challenges remain
Of course, it’s far from rosy and businesses are having to work hard and smart to move forward. The biggest challenge reported in our latest survey remain around increasing sales (42%) and hiring the right people (36%) suggesting that recruitment difficulties remain for the foreseeable future.

Time to exit?
We asked the question around exit plans and it’s positive to see that nothing has changed for 80% of respondents (versus 60% in July 23) with over 50% planning to exit in the next 3 years.

Conclusion
Whilst the numbers on face value are not significantly different from 6 months ago, with a shift in confidence by just 4pts, the underlying trend would suggest that the worst is over and that stability is returning albeit the external global threats outside of our control remain. The outlook for 2024 is certainly moving in the right direction although we were here 12 months ago with confidence at 72 – so proceed with caution, it’s not quite time to party!! As ever – keeping close to your clients, your people and your numbers with an extra close eye on cashflow are all key priorities in keeping your business in good shape and helping you drive it forward.

Download survey

Helping our clients make informed decisions with clearly articulated information is at the heart of what we do and we continue to be here for those clients who need us. We hope that the data in our latest research is a useful addition to your planning for the year ahead. If you’d like to discuss any of the contents of our survey, please don’t hesitate to get in touch.

 

 

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