• Senior decision makers from SMEs in the West Midlands predict average increase in turnover of 24% – the equivalent of £1.7 million – over the next five years, according to the 2015 Business Growth survey from Santander Corporate & Commercial1
• Nearly half (48%) of SMEs in the West Midlands region list their short term aim as growing the business organically
• Nationally, SMEs in Great Britain predict 37% growth over the next five years
Small and medium-sized business owners in the West Midlands are confident about their five year growth prospects, according to the latest1 Business Growth survey from Santander Corporate & Commercial. The research found that small and medium businesses with up to 249 employees in the West Midlands are predicting 24%, or the equivalent of £1.7 million turnover growth, over the next five years.
The survey suggests a strong outlook for short-term growth, with just under half (48%) of SMEs in the West Midlands reporting growing the business organically as an immediate priority. Just over a fifth (21%) wish to introduce new products or research and development and nearly a quarter (23%) plan to focus on retaining existing staff.
On a national level, senior decision makers from SMEs are predicting strong levels of growth over the next five years, with small and medium businesses with up to 249 employees predicting average turnover growth of 37%, the equivalent of £2.4 million, over the next five years.
Small businesses in Great Britain are the most optimistic, forecasting an average increase in turnover of 69%. This compares to medium-sized businesses which are predicting an average increase in turnover of 25% over the next five years.
The survival of their business, which was the top short-term priority in 20142 (57%), is now a priority for 30% of SME senior decision makers, suggesting more companies are now focusing on growth. More than a quarter (27%) of firms said they were focused on introducing new products while nearly a fifth (18%) said they were looking to hire new staff – compared to 12% who were prioritising this in 2014.
This improving business confidence is leading to more companies looking internationally for growth than any point in the last four years. Nearly one in five (18%) describe international expansion as the ultimate aim for their business compared to 6 per cent in 2014. Regional growth (27%) remains the most popular overall business aim for SMEs in the West Midlands, with selling the business to retire (15%) and building the business internationally (13%) also popular aims.
Despite the optimism and business confidence, businesses in the West Midlands still report facing challenges. A tough trading environment was seen as a challenge to growth cited by 16% of respondents. Lack of management know how (14%), access to capital (13%) and the ability to hire and retain the right staff (11%) also remain key challenges cited by business owners in the West Midlands.
Susan Davies, Regional Director, West Midlands, Santander Corporate & Commercial, said: “We are encouraged to see that SMEs in the West Midlands are forecasting growth over the next five years. The number of businesses looking to grow organically, both regionally and nationally, is very positive news for our region.
“Santander is committed to helping businesses prosper and has been a consistent supporter of businesses in the UK, with lending over the last four years growing by an average of 9% per year. Our innovative Breakthrough product suite, which was upgraded earlier in 2015, is designed to support the UK’s most ambitious, fast-growing businesses while unique tools and services such as the Trade Portal and our Trade Missions have been designed to help more firms export and trade internationally.”
SMEs working in the hospitality and leisure industry are the most optimistic in terms of different business sectors, predicting an increase in turnover of 99% over the next five years. This is closely followed by retailers, who predict 85%. Those in the construction (27%), manufacturing (19%) and IT and telecoms industries (15%) are also forecasting significant growth over the next five years.
In terms of the regional picture, while SMEs in the East Midlands are the most optimistic, SMEs in the North West and South East are the most conservative, forecasting 14% and 18% growth over the next five years respectively.
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Notes to Editors
Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. It has brought real competition to the UK, through its 1|2|3 products for retail customers and relationship banking model for UK SMEs. As at 30 June 2015, Santander UK was the most switched to bank, attracting 1 in 4 new retail customers. The bank serves more than 14 million active customers with c. 20,000 employees and operates through 900 branches and 68 regional Corporate Business Centres. Santander UK is subject to the full supervision of the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) in the UK. Santander UK plc customers are protected by the Financial Services Compensation Scheme (FSCS) in the UK.
Banco Santander (SAN.MC, STD.N, BNC.LN) is a leading retail and commercial bank, based in Spain, with a meaningful market share in 10 core countries in Europe and the Americas. Santander is the largest bank in the euro zone by market capitalization and among the top 12 banks on a global basis. Founded in 1857, Santander had EUR 1.51 trillion in managed funds, 12,910 branches and 190,000 employees at the close of June 2015. In the first half of 2015, Santander made ordinary attributable profit of EUR 3,426 million, a 24% increase.
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