UK entrepreneurs have seen their businesses grow considerably over the past year and are optimistic about their future, according to research.
Some 83 per cent of entrepreneurs have increased their headcount with over a quarter (28 per cent) of these businesses creating more than 50 new jobs, according to a study by EY.
The survey of 226 entrepreneurs also reveals that the majority (93 per cent) expect their turnover to increase in the next three years. However, just 23 per cent feel that they are able to attract the right talent.
The study was commissioned to assess how firms have performed in recent years and whether they expect to grow in the future, as well as to gather their views on the factors that they feel can help or hinder growth.
Nearly all of the entrepreneurs surveyed, across multiple sectors and regions of the UK, have well-established businesses with 73 per cent of respondents having run their company for at least a decade.
EY finds that three quarters of entrepreneurial businesses (75 per cent) have seen growth in their turnover in the last year with over half (57 per cent) witnessing a turnover increase of more than 5 per cent.
Looking ahead, over the next three years, all of the entrepreneurs surveyed expect their business to grow further, with more than half (56 per cent) expecting annual growth of over 10 per cent.
This view is especially prevalent in the pharmaceutical industry, where all of the respondents expect growth of more than 10 per cent.
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Stuart Watson, EY’s Entrepreneur of The Year UK Leader says, ‘Over the past 12 months the UK’s economy has strengthened, and this is reflected in the confident mood amongst these businesses.
‘Entrepreneurs have been recruiting in significant numbers and seeing reasonable growth over the past year. But more importantly more than half are planning ahead for double digit growth. Britain is open for business and the UK’s entrepreneurs are leading the way in terms of increasing their turnover and their headcount.’
When asked about the one thing the next government could do to make growing a business easier, more than a quarter of entrepreneurs (29 per cent) cite cutting red tape and a fifth (20 per cent) cutting business taxes.
In the South East and West of England a third of businesses (35 per cent) cite cutting red tape as the number one thing the next government could do to make growing a business easier. In contrast, a quarter of Scottish entrepreneurs opt for a cut in business taxes.
Despite the fact that UK entrepreneurs have firm plans to grow their businesses over the next year, they may come up against a skills shortage. More than three quarters (77 per cent) of entrepreneurs admit that they struggle to attract the right talent with over half (54 per cent) saying that this is down to a lack of the right skills and a fifth (20 per cent) stating that this was due to wage costs being too high.
Businesses in the South East and South West are having the most trouble attracting talent with 63 per cent citing a lack of skills as the core reason.
In London the war for talent becomes more difficult with more than a quarter (26 per cent) of entrepreneurs responding that they are having trouble attracting talent due to wages being too high, closely followed by too much competition (22 per cent).
Watson continues, ‘Overall the future looks bright for UK entrepreneurs, with many delivering strong performance in recent years, and expecting good times ahead. However, our survey highlights that while businesses are increasing headcount at a considerable rate and are expecting to grow even more over the next year, the right people may not be there to fuel that growth.
‘For entrepreneurs to sustain their growth plans, they need to demonstrate fresh thinking and an innovative approach to attracting talent from a global pool. This will help them stay ahead of the curve as the economy recovers and the war for talent intensifies.’
