COMPETITION from post-recession start-ups is the biggest threat to one-in-five SMEs in the South West, research by business funder Bibby Financial Services has revealed.
As official data showed the number of new UK businesses reached a five year peak in March this year*, small businesses in the South West listed ‘increased competition’ as their biggest fear in today’s brightening financial climate.
The SME Tracker, which surveys businesses with a turnover of up to £25 million and up to 250 employees, saw 22 per cent of businesses in the South West citing an increase in competition, which has come about as a result of the improving economy, as their biggest worry today. Meanwhile, more than one in ten (14 per cent) believed that red-tape is the biggest challenge they face.
Sharon Wiltshire, MD for Bibby Financial Services in the South West, said: “This is certainly a different picture from just a few years ago and the South West has returned to its position as a breeding ground for innovation and entrepreneurship.
“The economic downturn has fostered a DIY ethos in the country, which is now paying dividends for the economy through both recruitment and output.”
Other concerns from SMEs in the South West include a lack of skilled staff (nine per cent), rising raw material costs (15 per cent) and access to finance (five per cent).
According to official data from Companies House, there were 54,336 UK incorporations in March and figures have been steadily rising since 2009.
Wiltshire said the findings are positive but advised start-up business owners to ensure they plan ahead in the early days to ensure they can steal a march on the competition.
She said: “Technology is undoubtedly removing barriers to entry for a lot of industries, but it’s vital that new-start and early stage businesses have the financial means to invest for long-term success.”
Separate findings highlight the changing composition of the country’s business population and government statistics released in January show the UK’s creative industries – worth £71.4 billion in 2012 – are growing at around 10 per cent per year, outperforming all other sectors. Employing almost 1.7million people, according to the Department for Culture, Media and Sport, the sector includes advertising and marketing, publishing, IT software and computer services, product, fashion and graphic design and film and TV.[i]