Almost half of small businesses poised to expand

Small businesses are poised for growth despite the recession, with 49 per cent planning to expand in the next 12 months, according to research from the Barclays Have Your Say survey of local businesses. In addition, around 34 per cent are looking to stay the same or consolidate. Over three thousand small businesses took part in the survey, making it one of the biggest of its type conducted during the recession.

"A large number of small businesses are poised to expand when the time is right, perhaps taking advantage of any upturn in the economy," said Steve Cooper, Managing Director of Barclays Local Business. "A sizeable percentage are also not downsizing during the recession, which is an achievement in itself.

"Any decisions to expand should be carefully considered, but there are good reasons to expand at the right time. Companies with growth plans could be taking advantage of a completely different competitive landscape, where key competitors are missing or have downsized. While many of these businesses will not need finance, Barclays welcomes any approaches from commercially viable companies with an eye to borrowing, which is reflected in our interim results. Barclays has actually increased its lending to small businesses during the downturn."

When it comes to how long companies have been trading, it appears that younger companies are more likely to expand in the next 12 months with 60 per cent of businesses less than three years considering expansion compared to around 40 per cent of companies which have been in business for more than 11 years.

There are differences across the industries. The retail sector recorded the highest percentage of businesses planning to expand, with 54 per cent of companies planning expansion compared to 46 per cent in the trade sector.

The research also looked at the skills companies believe they need more access to, with marketing coming out top at 44 per cent followed by sales skills at 32 per cent and IT skills at 18 per cent.

"With the retail sector showing such growth plans, this will bring some good news to UK high streets which have been hit through this difficult period with outlets closing. We know from our research that the number one issue for small businesses is how to secure more customers. To help businesses with this and other aims, we're running over 600 of our Let's Talk free seminars this year on profit and marketing. More seminars are planned for the autumn which will help businesses with growth and consolidation plans."

Barclays provides top tips for businesses considering expansion. These include opening in another location, help on offering or diversifying your product or service-line, and targeting other markets or expanding to the internet.

When thinking about expanding, businesses should ask themselves the following key questions:

1 Is the market for your product or service growing?

2 Do you know how you're going to grow your businesses?

3 Have you drawn up plans, set objectives and made assumptions to support your growth?

4 Are you confident that your growth strategy will make your business more profitable?

5 Do you know how much money you need to meet your objectives in total?

Barclays business relationship managers will be able to assist with answering these questions.

Further information is available online at the Barclays resource centre: barclays.co.uk/business/running-a-business/