Commercial Finance Specialists

Firms hope to see an increase in turnover in 2012 but remain concerned about their profitability and ability to grow, a survey by AXA Commercial Lines has found.

Despite weak economic growth forecasts, 43% of SMEs in the UK expect their turnover to grow, while only one-in-six are expecting a decrease in the coming year.

The levels of optimism vary considerably depending on the business size, with the smallest feeling most vulnerable. Less than a quarter of sole-traders believe that turnover will improve in the coming year, while over half of SMEs with 50-99 employees expect an increase in turnover.

Overall expectations of profitability are lower across the board, however, with under a third expecting it to improve. 62% of SMEs believe that downward price pressures will squeeze margins and adversely affect their business. 29% expect this to have a major impact.

But any optimism over turnover and profit levels still doesn’t predict further recruitment. Only one in seven surveyed firms anticipate recruiting more staff during the year.

Matthew Reed, Managing Director Intermediary for AXA Commercial Lines describes a "complex picture" for UK based small businesses.

"It’s not all doom and gloom for sure", he said. "However there is a real need for valuable advice when it comes to risk management given the fact that, when asked to identify key risks facing their business, nearly a quarter of UK SMEs (23%) couldn’t name a single one. I find this quite staggering. In my view it means that brokers have a major role to play in helping their clients to both understand the risks their businesses face during these difficult times as well as manage them."

Commercial Finance Group can provide expert advice on matters of property-related finance, asset finance, and corporate finance. Contact us today!