SMEs expecting to increase profits and revenue in 2023, according to HSBC UK

Small businesses are forecasting increases in profits and revenue in 2023 despite the impending threat of a recession, according to research from HSBC UK.

One in three (38 per cent) business owners expect to see at least a 10 per cent jump in profits this year, with professional services firms leading the way (67 per cent). Just under half (47 per cent) of small business owners predict revenue to increase, with a third of those expecting it to grow by at least 20 per cent.

Businesses acknowledged the impact of financial threats such as rising inflation (41 per cent), followed by the decline in consumer spend (38 per cent), rising energy costs (36 per cent), wage inflation (22 per cent) and cash flow management issues (19 per cent).

However, over two thirds (76 per cent) of business owners said they had solutions in place to tackle these challenges. Nearly half (45 per cent) plan to increase prices and one in five (23 per cent) are reducing their energy consumption. As a result, nearly two thirds (65 per cent) said they were confident their business will survive.

Peter McIntyre, head of business banking at HSBC UK, commented: “Despite the challenges of a turbulent economic climate in 2022, small businesses are displaying strong signs of resilience and growth.

“HSBC UK remains committed to supporting customers with their growth plans as well as helping them to mitigate financial risk. A big part of that is providing the tools and information to help customers improve cash flow management, tackle supply chain issues and manage their overheads such as energy costs.”

HSBC UK’s research also found that one in four (26 per cent) small business owners are reporting that cost of living pressures are causing a decline in their wellbeing. HSBC UK’s early warning signs team have been proactively contacting customers that could be entering into financial difficulty to discuss how they can help.

So far, the majority of affected customers (68 per cent) have avoided defaulting on payments for at least six months after being contacted by the bank.

By Matthew Neville – Senior Correspondent, Bdaily

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