Most small businesses aiming for growth in next year, survey finds

A majority of small Scottish businesses intend to grow in the next year, a study has found.

The Federation of Small Businesses (FSB) in Scotland said its Big Small Business Survey found three-fifths of small Scottish businesses intend to scale up over the next 12 months, despite a series of challenges.

The Scotland-wide survey examined all industries, including agriculture and forestry, retail, education, and the arts.

FSB Scotland policy chair Andrew McRae said: “This is the most comprehensive study we’ve ever undertaken into the state of Scotland’s small businesses, the challenges they face and the opportunities they see ahead.

“We heard from firms in every part of Scotland, representing every industry sector.

“Too often, decisionmakers fall into the trap of treating business as a monolith, making decisions that assume our smallest firms are operating on the same playing field as multinational corporations.

“What this study demonstrates is that not only is there a distinction to be drawn between small businesses and their larger counterparts, but indeed there is a huge degree of diversity within the small business community itself.”

More than 600 small business owners responded to the survey, in which they were asked about their firm’s past, present, and future conditions, as well as challenges and opportunities.

Despite business owners’ intention to grow their firms, three-fifths reported a decrease in turnover in the last year, citing the cost-of-living crisis and economic uncertainty as the main reasons.

The FSB report concluded the cost-of-living crisis is the key obstacle to tackle to ensure small businesses in Scotland can grow.

Mr McRae highlighted how small businesses have had “a tough few years”, and 2022 “posed as great a challenge yet as the worst of the pandemic in 2020”.

He added: “It does appear, however, that things might be looking up and the much-anticipated economic recovery could be on the horizon, with three in five businesses telling us they plan to grow over the next year.

“We hope this study will serve as a useful tool for anyone needing to design and implement policies that touch the lives of small business owners.

“In recent years we’ve seen what can go wrong when decisionmakers don’t understand the challenges faced by our smallest operators, and we hope that the findings of the Big Small Business Survey can play an important role as we work to make Scotland the best place to do business.”

The full report can be accessed online at https://www.fsb.org.uk/resources-page/big-small-business-survey.