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A UK-wide survey of economic confidence amongst the small business sector has revealed that the country's entrepreneurs continue to have a positive, if marginally more cautious, outlook.
Almost nine out of ten (85%) of the country's entrepreneurs, questioned for the Bank of Scotland Business Banking’s quarterly survey, believe the performance of their business will be better or stay the same in the next 12 months – a slight fall of 3 per centage points since the quarterly survey in January. Just over one in eight (13%) businesses expect their business to be worse off in 2006.
Three in five (61%) small businesses remain confident in the country's economy, identical to the January figure (61%). Nevertheless, over a third (35%) of entrepreneurs believe general economic conditions will be “worse” in the next 12 months, compared to 33% in January.
After a rise during the last quarter of 2005, there has been a drop in the number of businesses expecting to invest more in their business in the year ahead. A third (33%) of small businesses now expect to increase investment over the next 12 months, down slightly from 38% last quarter. Nevertheless, over a quarter (26%) of small businesses plan to increase their investment by up to 20% in the next 12 months with a further 7% expecting to invest over 20% more. Conversely, just over one in eight businesses (14%) plan to invest less, up 1% point from the previous survey.
Increasing staff numbers is part of the business plan for over a fifth (21%) of small businesses over the next 12 months. Whilst this represents a fall of 11% points since January, just 7% of entrepreneurs believe they will employ fewer staff in the next 12 months.
Business life is evidently getting tougher with entrepreneurs clearly feeling they are having to work very hard to achieve their success. Despite optimism remaining high, three in five (60%) of small businesses claim it has become more difficult to run their businesses over the last five years – over a quarter (26%) of all businesses surveyed said it had become much more difficult. Just 3% thought business life was much easier.
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