A large majority of UK SMEs are optimistic about their turnover growth in 2025. Specifically, 71% of SME leaders expect their turnover to increase this year, while only 8% anticipate a decline. This optimism persists despite concerns about the broader economy and government policies, indicating strong confidence in their growth prospects.
However, 51% of UK SME owners feel optimistic about the country’s economic future. While a slight majority holds a positive outlook for the national economy, a significant portion remains cautious or pessimistic.
Supporting this, two-thirds (66%) of SME leaders believe the UK is falling behind other global economies, highlighting concerns about the UK’s economic performance compared to other nations.
Interestingly, many SMEs are more optimistic about their business growth. Over half of UK SMEs plan to expand their workforce in 2025, with 55% intending to increase their headcount. This aligns with the finding that 71% of SME leaders expect turnover growth, suggesting that hiring plans align with their growth ambitions.
These figures indicate that, despite concerns about the wider economy, a significant proportion of SMEs anticipate growth and plan to increase their workforce to support this expansion.
Impact on Confidence and Outlook
UK SMEs are optimistic about their growth prospects, demonstrating resilience and adaptability. While they identify areas for improvement in government policies and the broader economy, this highlights their proactive approach to seeking effective support.
SMEs are calling for more robust government policies to enhance their confidence and growth. Despite some caution about the broader economy, with only 51% expressing optimism about the UK’s economic future, SMEs remain focused on their operations.
Sentiment among SME owners is diverse, with 45% viewing the government’s performance positively, showcasing a balanced perspective. This diversity underscores the dynamic nature of the SME sector.
Moreover, the call for politicians to take SME needs more seriously—70% advocating for this—presents an opportunity for greater engagement and collaboration. Similarly, 69% of SMEs feel there is room for improvement in government support, which can lead to more tailored policies.
The belief held by 66% of SME leaders that the UK can improve its global standing reflects their ambition and drive.
Specific Policy Concerns
The past year brought changes and uncertainties with the general election and budget, encouraging SMEs to adapt and innovate. While rising costs and taxes are concerns for 42% of SMEs, this also highlights their resilience and resourcefulness.
Similarly, 40% of owners are mindful of higher taxes, underscoring their proactive approach to financial planning. The increase in employer National Insurance Contributions from April may prompt more businesses to explore innovative financing solutions.
There is a strong call for enhanced government support, with 70% of SMEs seeking more robust assistance. Policymakers have the opportunity to engage more closely with the SME community. The anticipation of a potential long-term industrial policy could pave the way for strategic growth and development.
The government’s focus on green energy is a significant priority, promising greater self-sufficiency and reduced dependence on volatile energy markets. While the push for green equipment may involve initial costs, it ultimately leads to sustainable practices and long-term savings for SMEs.
The Net Zero 2050 target is an exciting challenge, encouraging businesses to invest in new, greener machinery, particularly in industries that traditionally rely on diesel-powered equipment.
Optimism on the Rise
Optimism among UK SMEs is on the rise, showcasing their resilience and forward-thinking mindset. A significant majority (71%) of SME owners predict turnover growth in 2025, reflecting a strong belief in their ability to thrive.
Over half (55%) plan to expand their workforce, demonstrating their commitment to growth and job creation. This positive outlook is bolstered by the hope that with the government implementing clear goals, there will be more stability for businesses.
The financial landscape also presents opportunities for SMEs. With rising costs, more businesses might consider using finance in 2025, emphasizing the importance of working with reputable lenders and planning finance.
This proactive approach to financial management highlights the strategic thinking of SME leaders.
Seizing the Opportunities of 2025
As we step into 2025, UK SMEs stand at the threshold of immense opportunities.
Optimism surrounding turnover growth, workforce expansion, and strategic planning underscores this sector’s resilience and entrepreneurial spirit.
Despite challenges posed by the broader economy and government policies, SMEs have demonstrated an unwavering commitment to innovation and growth.
As NorthStar has previously highlighted, SMEs in the UK seem to be at a crossroads and this year presents a unique chance for SMEs to harness their strengths.
By engaging with government initiatives, exploring innovative financing solutions, and embracing sustainable practices, SMEs can position themselves as industry leaders.
The focus on green energy and the Net Zero 2050 target offers exciting avenues for sustainable growth and innovation. By investing in greener machinery and practices, SMEs can contribute to environmental goals while achieving long-term savings and efficiency.
For SMEs in the UK, 2025 might just be the year of promise to lay strong foundations. With resilience, strategic thinking, and entrepreneurial drive, SMEs are well-equipped to navigate challenges and capitalize on opportunities.
Let this be a call to action for SMEs to embrace the future with confidence, seize opportunities, and lead the way in driving economic growth and innovation.
Request your custom growth report today or contact us for personalised guidance on navigating the future.
