Small business owners innovate to stay ahead

Small business owners are increasingly diversifying and innovating as they look to capitalise on various  summer events in the UK and improve their bottom line, according to Aviva’s bi-annual SME Pulse survey.

The research also reveals that one quarter of SMEs expect to enjoy a boost to their business from summer events and while businesses in London are most confident in this respect, SMEs in the Midlands, Yorkshire and the North East are similarly optimistic.

However, there is some concern that the positive effects of a summer boost in trading could be short lived and lead to a worrying dip in revenues during the remainder of the year.

Trading conditions remain tough for many, with only 6% of firms surveyed reporting that conditions were “easier than expected” during the first half of 2012, down from 22% six months ago.

Meanwhile those who found trading conditions “as expected” increased from 36% to 50%, as SMEs made a more realistic assessment of their prospects.

Looking ahead, small businesses are polarised on trading for the rest of 2012.

While 28% say they expect strong or improved sales in the second half,  and 37% expect average sales, 20% are expecting poor sales and 15% are “unsure” of sales levels.

In addition, the numbers of SMEs cutting permanent or temporary staff, or reducing pay/hours/benefits have all increased from six months ago.

There is one further positive however – the number of SMEs concerned about cash flow has declined from 37% twelve months ago to 31% today.

David Bruce, commercial product manager at Aviva, comments: “Based on this latest data, SME owners are hanging on in there. Trading conditions clearly remain tough, while it seems many owners are perhaps being more pragmatic than optimistic in their forecasting of future revenues.”