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Product category: Banking / credit / debt
News Release from: Alliance & Leicester | Subject: Business accounts
Edited by the Insidemoneytalk Editorial Team on 26 December 2007

UK small businesses look on the bright
side for 2008

Despite uncertainty about interest rates, business taxes and the effects of the global credit crunch,

a survey commissioned by Alliance and Leicester Commercial Bank found that more than a third (35%) of the UK's SME population felt more positive about the year ahead and nearly half (46%) said they felt the outlook for their business was the same as in 2007 Following a year of economic turbulence, both consumers and big business are feeling apprehensive about the year ahead However, the UK's small business community is proving more resilient and is instead looking on the bright side, with less than one in six (16%) SMEs saying that their outlook for 2008 is negative

Brits might enjoy the odd moan about the weather but are well known for their fighting spirit, and this is certainly true of the country's entrepreneurs.

The survey found that younger entrepreneurs are feeling even more optimistic than their older counterparts as they head into the new year.

More than four in ten (43%) of 25 to 34 year olds say their outlook for 2008 is positive, compared to just over a quarter (27%) of those aged 55+, and only half as many of the younger group admits to feeling negative (12% compared to 20%).

Instead of sitting tight and waiting to assess the economic fallout, SMEs are planning plenty of activity for 2008.

A quarter (25%) plan to sell into new sectors, over a fifth (22%) will be developing new product ranges, more than one in ten (12%) will be boosting their team with more staff, 4% will be opening additional sites and a brave 6% will be spreading their wings and expanding internationally.

On areas that do concern SMEs, nearly half (47%) said that the economy was a real worry.

Over two fifths (44%) were anxious about taxes, more than a third (37%) about red tape and 28% about interest rates.

Only 4% cited non-financial factors such as climate change.

Steve Jennings, Director of Business Banking at Alliance and Leicester Commercial Bank, said: "Our research shows that the British entrepreneurial spirit is alive and kicking.

Entrepreneurs are key to the continued vitality of the UK economy, with small businesses accounting for more than 99% of the country's business population so it's positive news that the economic unrest of the last few months hasn't put small businesses off looking to the future in a positive frame of mind.

"However, while it is good news that small businesses are looking at growth and expansion opportunities in 2008, it is important that they closely manage their finances." Luckily the survey showed that small businesses are planning sensibly for the future, with a quarter (25%) planning to review their finances in the New Year and more than a fifth (23%) planning to set money aside for savings.

Jennings continues: "Small businesses should look for smart ways to reduce outgoings which will help support their growth plans for the year ahead.

Something as simple as making sure that they are with the most competitive banking provider can make all the difference to a business' finances.

Our research shows UK SMEs are currently missing out on over £500 million each year by not shopping around for the best business current account.".

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