Microbusinesses less confident than SMEs, study finds

Almost three quarters (73 per cent) of small and medium-sized enterprises (SMEs) at the larger end of the scale are anticipating business growth over the next two years, while only 45 per cent of microbusinesses are eyeing up similar ambitions.

The figures come from this year’s Albion Growth Report, a business confidence tracker which has found that SMEs at the smaller end of the scale tend to be a little less confident than their larger counterparts.

The report, which interviewed more than 1,000 SMEs of all shapes and sizes, found that only 31 per cent of microbusinesses expect to expand into new markets between now and 2019, compared to 61 per cent of larger SMEs.

Meanwhile, only 33 per cent of microbusinesses said that they expected an increase in productivity over the next 24 months, compared to more than half (57 per cent) of SMEs.

Study contributor Patrick Reeve, of Albion Ventures, said: “The key point emerging from this study is that size really does matter and microbusinesses, many of which are sole traders in the ‘gig’ economy, appear far more concerned about their future growth prospects than their counterparts with more than five employees, which have the necessary scale to withstand market uncertainty”.

“SME is a much used label but it’s important to look beyond this – as size plays a tremendously important role in determining business sentiment,” he added.