Positive outlook for SME Growth in 2013 despite turbulent start on the High Street


SME Growth in the UK

By David Taylor, CEO HB Prime Advantage

Despite recent reports of a volatile retail environment that has already seen the collapse of retail powerhouses including HMV and Blockbuster, there is a very positive outlook for the overall SME market in 2013.


Whilst the UK retail sector seems to be experiencing a turbulent beginning to the New Year, it is not all doom and gloom as 44%[1] of UK SME’s believe that their sales will rise over the coming year and 37%[2] are looking to grow their businesses in 2013.

Reasons for this boost in confidence can be attributed to both external and internal factors. Relief on business rates, government initiatives, and broadened economic indicators have all had an encouraging impact on SMEs’ confidence but according to Aviva, 65% of small and medium firms believe that improved bank lending schemes targeted at SMEs have been the most important factor in influencing business confidence. Many internal factors can also account for this positive outlook;  resilient SME’s have gained valuable experience since the economic downturn struck in 2008 and as a result CEO’s are now focusing their attention on innovation, investment, and internationalising their businesses in an effort to remain current and explore new markets.


These encouraging statistics come as a welcoming sign of the times. SMEs account for 99% of all UK organisations and employ over 13 million people (60% of private sector jobs), and thus are a pivotal component of the British economy. A positive outlook will act as a good indicator of how the overall economic performance will play out over the coming year. As Keith Alderson, managing director of Corporate and Business Banking at The Co-operative Bank points out, “SMEs and entrepreneurs are widely acknowledged as vital to Britain’s economic recovery so these results are good news as we head into 2013.”


A forecast of increased sales stimulates the need for growth and SMEs are certainly hoping to expand their businesses in 2013. According to a survey by the ECI, 78% of high growth SMEs plan to hire more staff and 48% are preparing to invest in R&D and new products. In addition to this, SMEs are looking to international markets to find new expansion opportunities with 43% citing Europe, and 39% considering Asian economies as having the greatest potential for growth opportunities. These figures not only suggest positive outcomes for SME’s this year but also for the British economy. Plans to hire more staff could help reduce unemployment rates, and exports will increase GDP.



HMV and Blockbuster are facing a very uncertain future which in turn has sent out waves of fear across the retail sector, but examples such as these are not reasonable cases to compare the fate of an entire sector. Both retailers specialise in specific products that are increasingly becoming obsolete as they are replaced by the digital world. Therefore the collapse of these companies can teach us a valuable lesson in adapting firm specific strategies as opposed to negatively affecting our view of the market as a whole. It is clear that trade confidence exists across all sectors and this should be the focus of the press going into 2013, not the demise of an unfortunate few.


2013 certainly looks set to be successful for SME’s in the UK. A renewed business confidence, supportive external factors and improved market indicators are all signals of a positive future for small and medium enterprises. Now is the time for SME’s to invest, innovate and expand their businesses to establish themselves as market leaders.

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