Entrepreneurs Show Growing Confidence in UK Economy
The Investec Entrepreneur Confidence Index, which tracks the confidence levels of entrepreneurs in the UK economy and their own enterprises, has seen a small rise of 4% in confidence since June. Some 56% of entrepreneurs interviewed in November 2010 believe that the UK economy will improve over the next 12 months, compared to 52% who said this six months ago.
Research from Investec Specialist Private Bank among some of Britain’s most successful entrepreneurs conducted for the Index, reveals that only 19% expect the UK economy to deteriorate next year, while 56% believe that the economic climate will represent an opportunity for them, compared to 14% who think it will be a threat.
Interestingly, despite the huge debate about the impact of the recent government spending cuts, only 27% of entrepreneurs interviewed see this as a threat to their UK operations. A further 15% see it as both an opportunity and a threat.
The findings reveal that 91% expect the profitability of their UK businesses to increase next year, with 44% saying that it is very likely that they will launch new ventures in 2011, and a further 31% saying it is quite likely that they will do this.
Some 16% of entrepreneurs interviewed expect their cashflow position to improve significantly next year, with a further 47% expecting a slight improvement here. Only 9% expect this to deteriorate. Given these findings, 32% expect their 2011 revenues to increase by over 20% and a further 15% expect growth here of between 15% and 20%. None of those interviewed expect a decline in their revenue.
One of the main driving forces behind growth in 2011 is the current low interest rate environment, with 46%, identifying this as a positive influence and only 9% saying it will have a negative impact.
Obstacles Facing Entrepreneurs
Despite the general positive outlook from those leading entrepreneurs interviewed, 56% still believe that access to capital will be quite hard next year, and almost one in five (19%) expect it be very hard to secure. Only 6% expect it to be easy to find.
Furthermore, the current regulatory and tax environment in the country means that 59% think it is not conducive to launching new ventures, with one in five believing it is a very unattractive for doing this.
Ed Cottrell, Investec Specialist Private Bank, said: “The overall findings from our index are positive, and show a growing level of confidence in the UK economy from some of our leading entrepreneurs. However, there are still a few issues that need to be addressed if they are to receive the level of support they need to meet their business aspirations. Clearly, access to capital remains a concern for them, and the tax and regulatory environment is still not seen as being attractive for launching new ventures.
“As jobs are lost in the public sector, more emphasis will be placed on private enterprises to grow and increase their headcount. It is in the national interest to provide them with as much support as possible to help them achieve their goals,” he added.
Given the overall environment in the UK, 16% of leading entrepreneurs interviewed said that they had plans to drop their UK residency, and 9% intend to move their UK operations abroad to other countries with more appealing tax and regulatory environments.