Entrepreneurs have seen their businesses grow considerably over the past year and are optimistic about their future, according to a survey from accounting- and consulting firm EY. The shortage of talent looming on the horizon is considered as the largest obstacle to growth.
The research from EY, held among 226 UK entrepreneurs, shows that three quarters of entrepreneurial businesses (75%) have seen growth in their turnover in the last year with over half (57%) witnessing a turnover increase of more than 5%. From a headcount perspective 83% of entrepreneurs have increased their FTE’s, with over a quarter (28%) of these businesses creating more than 50 new jobs. “Over the past 12 months the UK’s economy has strengthened, and this is reflected in the confident mood amongst these businesses. Entrepreneurs have been recruiting in significant numbers and seeing reasonable growth over the past year,” says Stuart Watson from EY.
Looking forward the view is positive: over the next three years, the vast majority of entrepreneurs (93%) expect their business to grow further, with over half (56%) expecting annual growth of over 10%. This view was especially prevalent in the pharmaceutical industry, where all of the respondents expect growth of more than 10%.
The researchers also asked entrepreneurs to identify key improvement areas for the UK government. Over a quarter of entrepreneurs (29%) believes that the country’s policy-makers should cut red tape, while a fifth (20%) advocates for lower business taxes.
Obstacle to growth
A shortage in talent is regarded as the largest obstacle to growth: more than three quarters (77%) of entrepreneurs admitted that they struggle to attract the right talent with over half (54%) saying that this is down to a lack of the right skills and a fifth (20%) stating that this was due to wage costs being too high. Businesses in the South East and South West are having the most trouble attracting talent.
“While businesses are increasing headcount at a considerable rate and are expecting to grow even more over the next year, the right people may not be there to fuel that growth. For entrepreneurs to sustain their growth plans, they need to demonstrate fresh thinking and an innovative approach to attracting talent from a global pool. This will help them stay ahead of the curve as the economy recovers and the war for talent intensifies,” concludes Stewart.