Hitachi Capital Business Finance has found evidence to suggest small businesses resilience has not wavered as 2021 gets off to a start, despite a challenging 12-months characterised by Covid-19 inspired lockdowns.
Nationally, 83% of small firms say they have a fresh set of goals in place to secure the growth for the year ahead, according to new Business Barometer research from Hitachi.
At a time when the UK has been plunged into a third national lockdown, YouGov, on behalf of Hitachi, asked a nationally representative sample of 1,107 small business owners across various sectors what they will be prioritising to make their businesses stronger in 2021.
The study found that while intent to secure growth is consistent with levels recorded 12-months ago, plans on how to achieve it have changed. For 2021, small businesses have prioritised plans to focus on their finances and save money to reduce the impact of continued uncertainty.
Almost a third of survey respondents (31%) said they were planning to strengthen their business by keeping fixed costs down compared to 26% in January 2020. Further, more than a quarter of small business owners (26%) said they were working to build up their financial reserves.
In addition to saving money, January 2021 saw a rise in the proportion of small businesses that were actively putting in place contingency plans in the event of prolonged market volatility (rising from 15% in 2020 to 21% in January 2021).
The research found that small businesses that predicted growth in the next three months were twice as likely to be hiring younger people to train and develop (21%) rather than hiring senior-level, expensive talent (13%). These businesses were also the most likely (20%) to be streamlining and reducing costs by spending time investing in the people who already worked for the company.
The most adaptable sectors for the start of 2021 were manufacturing and retail. In the manufacturing sector, small business owners were most likely (45%) to be focusing on increasing new business income and sales to grow. In retail, small businesses were most likely to say they were doing what they could to diversify the business and offer new lines of services (36%).
Hitachi Capital Business Finance, a division of Hitachi Capital (UK) PLC, is a provider of business asset finance to SMEs and bigger corporations across the UK. The business has an asset portfolio of more than £1.3bn and is active across the transport, agriculture, construction, manufacturing, materials handling and financial services sectors.
Hitachi Capital European Vendor Solutions is active in 20 countries with offices in London, Amsterdam and Dublin. The business also provides finance to other independent manufacturers throughout Europe looking to offer financing solutions to their distribution network and customers.