London's small businesses to forge ahead in next decade

The research, which surveyed over 500 small business decision makers as part of the Everline Small Business Tracker, found that businesses from London are the most optimistic about their growth prospects, expecting revenues to increase over the next ten years by an average of 44% or £162,000 to £528,000 in 2025. This is over twice the turnover expected by small business leaders in the North, who on average expect growth of just 33% or £65,000 to £263,000 in the same period. A fifth expect no increase at all.

Business decision makers in the South (excluding London) are the most pessimistic about their growth options with almost a quarter (24%) predicting zero turnover by 2025. The average small business in this region only expects 33% or £61,000 growth. This is followed by growth expectations of 31% or £63,000 in the Midlands and 37% or £80,000 in Scotland.

Media, marketing, PR and sales were the most confident sector expecting revenues to increase by over 45% by 2025 – a potential turnover increase of £330,000. This was followed by the finance and accounting (43%) and IT & Telecoms sectors (43%).  

Russell Gould, COO of Everline, commented:

“With the average turnover of small businesses in London already more than 80% higher than that of other regions, businesses in the capital look set to move further ahead of the rest of Britain, with revenues forecast to increase by around £162,000 by 2025 compared to the £82,000 increase expected around the country as a whole.

“This is particularly telling given the government’s commitment to devolving more powers to the regions and creating small business hubs outside of the capital. Although small business growth has increased dramatically in the last ten years, it’s clear from our Small Business Tracker that more needs to be done to encourage a similar decade of growth and instil confidence in our small business network, especially outside of London.”

One area that could be holding regional growth plans back is digitalisation. Despite the growing importance of the digital economy, over a third (36%) of small businesses in the North dedicate only a fraction of their financial resource to digital activities, such as buying and selling online, and plan to reduce or keep their online expenditure flat over the next 10 years. This compares with just over a quarter (26%) of London businesses who said the same.  A further 10% wish to increase spend but did not have the financial means to do so, while 11% felt they did not have the necessary skills.

With small businesses that do sell online making £810,000 a year on average through this channel, this means over 1.5m small businesses across the country are missing out on a significant potential revenue boost by failing to capitalise on the e-commerce marketplace.

Sam Alderson, Economist, Cebr, added:

“A few years ago small businesses could be forgiven for thinking that sophisticated technologies were only within the reach of larger corporations who could afford the up-front investments. However, while there is still more that can be done to reduce the costs, digital technologies are becoming increasingly accessible to smaller businesses. Given the multitude of benefits that technologies can bring, from shaving time off everyday tasks to broadening a customer base, more could be done to promote and support the uptake of digital technologies in the nation’s small businesses.”