Eight in 10 small businesses finish the year backing new growth plans for 2025
More than eight in ten (81%) UK small businesses are prioritising new initiatives to boost their overall growth prospects for 2025.
Increasing new business sales (43%) and reducing fixed costs (24%) are priority areas business owners want to focus on - but there's also evidence the recent changes to employers' National Insurance could significantly impact hiring plans for 2025. Nationally, only 7% of small businesses surveyed are prioritising making senior hires for 2025 - and only 9% of small business owners plan to hire young people that they can train and develop.
The findings are from the quarterly Business Barometer study by Novuna Business Finance, and the new data suggests the firm resolve by small businesses to invest in business development for 2025 follows resilient growth forecasts for this current quarter. Nationally, the percentage of small businesses experiencing quarterly growth stands at 35%, as the period since July 2024 represents a two-year high in small business growth forecasts.
Regionally, growth planning for 2025 is being driven by the same regions that reported a strong growth outlook for Q4 2024. Small businesses in London (94%), the West Midlands (83%) and North East (83%) are most likely to be investing in future growth projects for 2025 - and these were the same regions that have enjoyed an upturn in growth forecasts this quarter.
By industry sector, small businesses in the media (92%) and manufacturing (90%) sectors are most likely to be prioritising new growth initiatives for 2025 - and the Novuna data shows there are year-on-year increases across five industry sectors - manufacturing, construction, retail, media and agriculture.
Percentage of small businesses prioritising new growth initiatives for 2025 in order to make their business stronger - results by sector
Q4 2024 Q4 2023
Media 92% 87%
Manufacturing 90% 83%
IT/Telecoms 87% 88%
Retail 85% 82%
Hospitality 83% 86%
Agriculture 79% 75%
Construction 79% 76%
Finance & Accounting 79% 83%
Medical Services 75% 83%
Legal Services 67% 79%
Real Estate 72% 79%
Transport & Distribution 70% 78%
Top 10 initiatives to power growth in 2025
Nationally, more than two in five small businesses are looking to increase new business income for 2025 which, for one in five, involves diversifying their business model and developing new products and services. Financial prudence is also seen to be key for the year ahead - both in terms of doing more to tackle fixed costs and building up financial reserves.
National Sector most likely Region most likely
Average to be doing it to be doing it
Increasing new business 43% Manuf. 51% North West 52%
Inc/sales
Reducing fixed costs 24% Hosp & Leisure 36% North East 35%
Building fin reserves 23% Hosp & Leisure 31% Yorkshire/Humber 33%
Diversifying Business 21% Medical Services 31% Yorkshire/Humber 28%
new service lines/products
Planning & business budgeting 20% Manuf. 25% Wales 31%
Advertising online to increase 18% Retail 24% North East 24%
awareness or sales
Invest in marketing to 16% IT/Telcomms 24% London & South East 21%
raise service and brand awareness
Existing staff investment 14% IT/Telcomms 20% West Midlands 23%
Contingency planning for 12% Construction 18% Wales 17%
prolonged market uncertainty
Expanding into new 12% Medical services 20% London 22%
geographical markets
Investing in digital technologies 12% Medical services 19% London 26%
Joanna Morris, Head of Insight at Novuna Business Finance comments: "A lot of attention in recent weeks has been on the Autumn Budget - and whilst our data suggested that 86% of UK small business owners were fearful of Budget announcements, in truth small businesses finish 2024 in a resilient position. The percentage of enterprises predicting growth has been at a two-year peak since July and, on top of this, a huge proportion are already prioritising growth projects to invest in for the year ahead. At Novuna Business Finance, we are committed to helping established businesses to fulfil their true potential to ensure the resurgent confidence of small businesses can be further built on in 2025."
