Entrepreneurs remain optimistic about business prospects, despite economic uncertainty
20 February 2017
- 54% of entrepreneurs predict greater than 10% profit growth in the next three years
- Nearly a third (32%) plan to hire more than 20 staff
- Economic uncertainty & talent attraction are the single biggest challenges facing fast-growth businesses
- 23% said they thought the outcome of the EU Referendum would have no impact on their business in the short-term
UK entrepreneurs reported a strong performance over the last year and are optimistic in their outlook for the future, according to a survey released by EY today.
69% of respondents quoted an increase in profits over the last 12 months, while 38% experienced double-digit growth (greater than 10%). In addition, 88% created new jobs, with over half (54%) taking on more than 20 new recruits in the same time period.
Looking ahead, despite 30% of entrepreneurial business leaders describing their single biggest business challenge as ‘economic uncertainty’, 54% predict a greater than 10% profit growth in the next three years and nearly a third (32%) plan to hire more than 20 people in the next 12 months.
Joanna Santinon, UK Entrepreneur Of The Year Programme Leader, comments: “Characteristically, entrepreneurs are eternal optimists committed to their cause. In the face of uncertainty they find a way to grow. In fact they use times of change to their advantage, by innovating and disrupting the status quo.
“Asked what motivated them to start their own business 24% of those surveyed said they had spotted an opportunity in the market. 44% said it was an opportunity to follow their passion and make a difference; that passion translates into business success.”
However, 59% of entrepreneurs did express difficulties in attracting the right talent to fuel their growth plans, 35% of which blamed a lack of skills. A further 9% said it was due to high competition and 11% said it was down to high wage demands. 35% did not have any difficulties hiring talent.
Nearly half of those surveyed (47%) thought the UK's exit from the EU would not cause any issues for them when recruiting the right people, compared to 32% who said it would, 21% didn’t know.
On the impact of the EU Referendum vote, 23% of entrepreneurs expected it would have no impact on their business in the short-term, whilst 28% felt it was impossible to tell until the UK officially leaves the EU.
Long-term, 21% said the outcome of the vote would be beneficial for their business and 13% expected no impact at all, however 29% predicted it would affect their business detrimentally.
At the time of the survey, when asked ‘what is the single most important element of any Brexit deal for your business?’ 30% said ‘access to the single market’, 20% access to European labour, 19% reduced regulation and 12% an opportunity to export to new regions.
Santinon added: “True there is much uncertainty in the market right now, which is set to stay for the foreseeable future; but this is an environment where entrepreneurs typically thrive and get ahead of the competition. Their optimistic perspective stands them in good stead. With a real ‘can-do attitude’, many of them will already be implementing plans to capitalise on the opportunities in the new world we are embarking on.”
Alumni from EY’s Entrepreneur Of The Year programme were surveyed, with 216 responses, to gauge their performance in the last year, their plans for the future and their sentiment on market conditions. More than two- thirds (70%) had been established for more than a decade, on average employed around 420 employees, and the majority (52%) had a turnover of between £1m and £40m.
Santinon concluded: “It is more important than ever that we support the ‘engine house’ of our economy, the entrepreneurial businesses who are leading the charge and helping us to navigate through uncharted territory. To give them the best chance of success we must all work together to help build a healthy ecosystem that will allow them to flourish.”