The majority of small firms have got through the recession by innovating or improving their existing proposition, research has found.
According to a survey by the Federation of Small Businesses (FSB) and ICM, which canvassed almost 10,000 small companies, more than half had escaped the worst effects of the recession by innovating, creating new products and services.
The survey found that 53% of businesses had introduced new or improved products and services last year, while 51% intend to continue innovating next year. Almost half said they expected to increase their customer base next year, while one in five are looking to hire more people.
Meanwhile, more than a quarter reported that their profitability had increased over the last 12 months, and 30% had seen their sales volumes grow.
In its ‘election manifesto’, published today, the FSB argued that entrepreneurs would lead the UK out of the recession with this innovation and growth, and that small businesses had been responsible for 80% of job creation in the five years to 2007.
John Wright, national chairman of the FSB, urged the government not to pull the rug out from under small businesses in light of the growth plans uncovered by the research.
“As the UK goes to the polls next year, public debt and unemployment will still be high, and the government will have to make tough decisions to encourage recovery,” he said.
“The survey shows that small businesses will clearly be at the heart of that recovery, and must be given all the support they need to get on with the job of growing the economy out of recession.”
The FSB said a third of the small firms that had borrowed finance found their rates had increased over the past year, while 49% had not taken out any loans at all in the last 12 months.
The organisation is calling for a renewed economic stimulus package, with targeted measures to help small businesses continue to create jobs, get access to finance, innovate and launch new start-ups.
These measures include renewing the Enterprise Finance Guarantee (government loan guarantee) scheme when it runs out in March, suspending tax increases, a freeze on employers' National Insurance (NI) contributions and NI rebates for new jobs in small businesses.
© Crimson Business Ltd. 2009
