Small Business Insights – a look at the attitudes and trends in 2022

We recently interviewed over 1,000 small businesses to discover the key trends among SMEs right now, and provide the support they need to thrive in this environment. Here’s an overview of our findings, which we hope will inspire your clients to go even further this year. 

The future looks bright 

Of all the business owners we spoke to, an impressive 59% said they were expecting an increase in business activity, and only 10% expected a reduction. 

Having made it through the pandemic, it’s clear that business owners feel more confident about dealing with disruption. We’re all adjusting to new ways of living and working, but despite the ever-changing environment, more businesses feel they can adapt – and are therefore more likely to start focusing on growth. 

More employees, more applicants 

Traditionally lower pay sectors such as agricultural and transport businesses are finding recruitment the hardest, while retail and financial services are finding it much easier.  

What’s also interesting is that over half of businesses with more than 100 employees said they were finding it easy to recruit for open roles. This shows the importance of supporting smaller businesses with accessing talent, which has always been a pressing need. 

Good prospects = good work/life balance

70% of all business owners that we spoke to said they have a good work/life balance, which is reassuring after the challenges of Covid and Brexit. However, businesses who are expecting trade to decrease are more likely to experience a poor work/life balance, demonstrating just how important it is to have a finance buffer in place. 

This shows us why brokers and loan platforms like us are so important. By helping a business access finance quickly and easily, we can help them improve their financial outlook – all while taking the stress out of the process. 

Marketing is the secret to growth 

Our report found that across the board, SMEs rely on word of mouth marketing to grow. 50% of all businesses we spoke to use this channel, followed by social media at 43% and email marketing at 38%. 

However, while 84% of businesses said marketing is important, more than a third of smaller businesses admitted they don’t actively do any marketing. 65% of these smaller SMEs said they do not feel the need to, while 23% don’t have the budget and 15% don’t have expertise.

It’s unsurprising to note that in 80% of smaller businesses, marketing is carried out by the business owner – while larger businesses of 100-250 people are more likely to have dedicated resources in-house. 

Marketing helps to get your business out there, and scale gives you more money to invest in marketing. So for smaller businesses who may have less funding and time, getting finance to boost their marketing could be key. 

Technology is king 

At Funding Circle, we place huge emphasis on technology – so it was great to see that most businesses we spoke to said they feel technology is important. 

However, 70% of businesses who are expecting an increase in trading said technology was important, compared to less than 60% among those expecting a decrease. This aligns with the fact that businesses who have invested in technology are more likely to be expecting an uptick in trading – showing a clear link between technology and success. 

Prioritising innovation seems to be a winning formula for SMEs, who shouldn’t shy away from technology just because of their size. 

Be ready for anything

Lastly, we found that contingency planning has become more of a priority for businesses after the impacts of Covid-19. 

Half of businesses said they carried out risk assessment prior to the pandemic, and only a fifth had not. Unsurprisingly the planning paid off – with 84% of businesses who had done so saying their plans were effective. With risk assessment helping to prepare your business for anything, it’s no wonder these businesses are expecting their trading to increase. 

Now, just over half of all businesses have increased their risk assessment, in order to avoid the recent disruption happening again. As a result, we could see more businesses applying for finance – to help them improve cash flow, or invest in their business operations.

To find out how we can help your clients with finance in light of these findings, please contact the team on broker@fundingcircle.com.