Member Survey

Highlights:

• Entrepreneurial confidence remains subdued, with just 58% of members feeling optimistic or very optimistic about the year ahead. This compares to an average of 79% over the 2 years prior to the Nov 2024 budget. Confidence has further declined since the last survey, with members highlighting difficult trading conditions, uncertainty and concern that the autumn budget may bring further challenges.

• Confidence in government economic strategy has weakened further, with 57% of members believing policies will negatively impact their business in the next 12 months – up sharply from 39% last quarter. Reducing taxes, particularly national insurance rates, is seen as a priority.

• Despite these pressures, growth expectations are resilient. Forty percent of members forecast turnover growth, while a further 25% expect expansion in excess of 20%. Hiring intentions remain strong, with 44% of entrepreneurs planning to increase headcount this year.

• Adoption of artificial intelligence is now widespread, with 94% of members using AI in their businesses. The most common applications are marketing and content creation (82%), operations and process automation (58%), and data analysis and forecasting (37%).

• AI adoption is already driving performance improvements, with 67% of members reporting gains – including 17% who describe the impact as significant. Investment plans are also accelerating, with 73% of members expecting to increase AI spending in the next 12 months, and 28% planning substantial investment.

Highlights:

• Entrepreneurial confidence is beginning to recover, with 67% of members feeling optimistic or very optimistic about the year ahead – an improvement on recent quarters, though still behind last year’s levels.

• Growth expectations are strengthening, with 68% of members forecasting revenue growth over the next 12 months. Nearly a quarter (23%) of entrepreneurs now anticipate growth in excess of 20%, marking a striking turnaround from last quarter, when none of the members surveyed expected high growth.

• Members are seeing opportunities within their current markets (76%), while 42% plan to launch new products or services. One in four (25%) are considering acquisitions in the coming year.

• Despite improving trading conditions, uncertainty persists, with members reporting fragile market sentiment and continued caution from customers and investors.

• Adoption of artificial intelligence is widespread, with 90% of members now using AI – primarily for content creation and research. However, lack of in-house expertise is a key barrier to further adoption, with data protection also a concern.

• Confidence in government policy remains low, with 71% of members believing the current approach does not support entrepreneurial growth.

Highlights:

• Confidence in government economic policies for entrepreneurs is low, with 47% of respondents strongly disagreeing that current policies will help grow the UK economy over the next 12 months. In total, 82% expressed some level of disagreement, citing rising costs, tax burdens, and a lack of incentives for business growth as key concerns.

• Hiring plans vary with 14% now intending to increase headcount by more than 20%. 15% now plan to cut their workforce, signalling growing caution in the job market.

• Rising costs, particularly National Insurance hikes, are a major concern for our region’s entrepreneurs. The biggest worry is the added financial strain these increases place on smaller businesses, making it harder for them to operate and grow. Re-investment into their businesses is at risk.

• Challenges are mounting, with ‘People’ (44%) and ‘Sales’ (43%) being the most pressing issues. Slower sales cycles and cautious customer spending are making growth harder, while recruitment struggles (especially for skilled roles) persist.

• Raising finance remains a mixed picture. Entrepreneurs are seeking to raise external finance to fuel growth plans but find the cost of finance and the length of time it takes to secure it frustrating.

Highlights:

• Business confidence has dropped by 23%, with only 66% of respondents expressing confidence in their business prospects. This marks the first time confidence has dipped below 80% since we began conducting our Member Pulse Surveys.

• An overwhelming 77% of respondents disagree that the budget will help entrepreneurs grow the UK economy, with 57% expecting a negative impact on their own business prospects in the next 12 months.

•  While 59% of entrepreneurs still anticipate top-line revenue growth, the percentage expecting growth of over 20% has halved. Additionally, 39% now foresee no growth or a decline in turnover, up from just 16% in the last quarterly survey. Employment plans have also been scaled back, with only 7% planning to increase headcount by more than 20%, down from 23% last quarter. Alarmingly, 14% now plan to reduce staff over the next 12 months.

• Despite concerns, several respondents acknowledged positive aspects of the budget, including the commitment to a stable corporation tax rate, tax relief on capital spending, and tax relief on innovation—factors that allow businesses to plan and make informed decisions.

Highlights:

• Optimism remains high with 86% reporting feeling optimistic or very optimistic. However, there has been some tapering of optimism.

• Pessimism has increased very marginally with 3% feeling pessimistic compared to no members feeling pessimistic in May 2024.

• When asked about the UK economy as a whole the sentiment from entrepreneurs is more mixed with 50% feeling neither optimistic or pessimistic. Most say this is because it’s too early to say what impact the new government might bring to the economy and there’s a period of wait and see what the October budget will cement.

•  There’s a feeling that until the budget, there may be stagnation on decision making for investment. Many members are concerned about future government policy announcements particularly the impact on taxation, workers rights and the overall burden of legislation on SMEs.

• Whilst managing their people is still a big challenge for members, this survey highlights sales and cashflow as the challenges at the forefront of our members concerns. One quarter of members cite cashflow as a challenge, up from 15% in the previous survey. Members are also seeing less marketing concerns and more sales concerns which may indicate some stagnation in the market as we wait to see the October budget and direction of the new government.

• Despite this, the expectation is that most businesses will grow turnover this year, with 1/3 expecting growth over 20%. 

• As in previous survey’s, members expect to grow through gaining domestic market share. Internationalisation plans have fallen this quarter with only 13% planning on going global versus nearly a quarter in May 2024. Acquiring plans also appear to be on the backburner with only 12% planning growth by acquisition (vs 18% in our previous survey).

Highlights:

• Optimism is the highest since our survey began in 2022, with 88% of respondents feeling optimistic or very optimistic about their future business prospects for the next 12 months.

• Growth predictions remain strong with 83% expecting turnover growth this year and more members expecting to hire staff. Growth is predominately expected from expansion in their existing markets but over half (56%) are innovating and have plans to introduce new products or services this year.

• Nearly one fifth of respondents (18%) are planning to make acquisitions this year with 25% expecting to raise external finance within 12 months.

• For 44% of members, the biggest challenge is people. As noted in previous surveys, finding and retaining good people is an ongoing issue. Members are reporting candidates have high salary demands that don’t necessarily match their skills. There’s ongoing poaching of staff within the region which is putting upward pressure on salaries.

• Pressures on sales and cashflow have reduced this quarter which is consistent with improved business confidence.

Highlights:

• Optimism remains very high amongst members with 83% either optimistic or very optimistic about the next 12 months. This is backed up with 75% saying they expect to grow their turnover and 59% expecting to grow headcount.

• Nearly half (44%) of members are having sales challenges and most commented that they were finding the sales cycle taking longer to complete than they’d expected.

•  Although nearly one third of members are still forecasting high growth greater than 20%, this number has fallen by 12% since the last pulse survey in November 2023. More members are saying growth will be in the 0-20% range.

• There’s a slowing down in recruitment with 39% of members saying they’ll keep headcount steady this year, rather than grow.

• 79% of members believe it is important to be an inclusive employer and 54% have taken action in the past 12 months to educate themselves about equality, diversity and inclusion (EDI). 78% already have an firmwide policy on EDI.

Highlights:

• 83% of respondents are optimistic or very optimistic about their business prospects for the next 12 months. This is up from 77% reported last quarter and 73% reported in November 2022. This gives confidence in the regional economy to navigate challenges by political and economic uncertainty.

• Optimism is backed up with expected growth in revenue for the next 12 months with 41% reporting they expect to grow by more than 20% - this is up from 30% in the last quarter and therefore evidences optimism. Overall 78% of our respondents said they were anticipating to grow in the next 12 months.

• Members are hiring staff with 58% saying they have plans to hire in the next 12 months, and nearly a quarter (24%) saying they will increase their overall headcount by more than 20%. These are broadly in line with our findings last quarter.

• In this survey we asked about members plans to raise external finance to fund their growth plans and found that 40% of respondents said they were planning to raise finance – of which 28% will do so in the next 12 months.