Scottish micro-businesses set to bounce back as trading rises, Shawbrook research reveals

  • Scottish micro-businesses expect new revenue streams will drive activity levels into 2022
  • Almost three quarters (74%) have business savings in place to upskill employees and become more cyber resilient
  • Nine out of ten firms with a business savings account say it gives them the confidence to operate successfully
  • Almost a third (32%) plan to hire more employees over the next 6-12 months

NINE in ten (86%) Scottish micro-businesses expect activity levels to bounce back over the next 12 months as consumer demand rises, according to new research into one of the most important parts of the Scottish economy. 

Shawbrook Bank’s Micro Business Monitor surveyed* Scottish businesses with 25 employees or fewer – known as the backbone of the economy – in a bid to understand the opportunities and challenges that lie ahead for more than 360,000 micro-business in Scotland.

It found that two thirds (65%) say their business diversifying and introducing new revenue streams will drive this bounce back, while 68% say this will come from increasing consumer demand for products and services.

Almost a third (32%) also intend to hire additional full-time or part-time employees in the next six to 12 months.

Positive impacts of the pandemic

Three quarters (75%) of Scottish micro-businesses felt optimistic when reflecting on their trading prospects over the past six months. Despite the challenges, 58% said that demand for their businesses’ products or services had increased.

For those that did see a drop in demand, this was due to a decrease in consumer demand (73%), trading being paused during lockdown (55%), and staff isolating or shielding (9%). 

Alun Williams, Commercial Director of Savings at Shawbrook Bank, said: “It’s extremely encouraging to see Scottish micro-businesses have a positive outlook for the next 12 months, a reflection of the agility that allows them to adapt more easily to external factors. However, in the short-term, micro-businesses need to think about upcoming opportunities or challenges and how they will be funded.

“Many firms have experienced huge changes over the past 18 months but have learned to adapt or innovate and are now in a position to expand their offering. Having the availability of business savings will help these firms invest in their future, create new jobs, or train staff.

“I’d urge any business to include savings as part of their long-term strategy and planning as having this pot of money can provide great reassurance, which after recent headwinds, can only be a good thing.”

Planning ahead

Encouragingly, more than half (51%) of Scottish businesses know exactly where every penny is coming from and going to. Almost three quarters (74%) also have a business savings account in place with 34% upskilling staff, 31% hoping to improve cyber resilience, and 29% saving for expansion of new products or services,

Despite the challenges of the past 18 months, 91% of Scottish micro-businesses say having a business account in place gives them the confidence needed to operate successfully.

Looking forward, 83% expect their business to grow over the next 6-12 months with more than half (54%) planning to use savings to expand their offering, and 49% using surplus profits towards future opportunities. 

Almost half (47%) also plan to invest in new equipment over the same period while 30% will introduce new training for employees or invest in digital, technology or automation.

Case study example

Glendale Creative, a full-service design and marketing agency, decided to pivot its business after live events and conferences were cancelled during lockdown.

The firm used its business savings pot to upskill colleagues to meet changing demand for digital creative briefs and invested in new IT and security infrastructure to support staff working from home.

Sara Garvey, Finance Director at Glendale Creative, said: “When COVID-19 struck, the desire for many of our in-person services disappeared. This forced us to pivot and focus on developing the digital side of our business. The requirement for all sorts of digital assets – from coding to voice overs – intensified.

“As businesses developed new ways to communicate with their staff beyond traditional email, the requests for video also increased significantly. Our clients wanted to share their latest strategies, policies, and updated systems to their customers and homeworking staff in the most innovative way – to not only grab their attention but also maintain it. Thanks to our savings built with Shawbrook, and the nature of the account we had with them, we were in a solid position to react quickly.”

Glendale Creative has been a business savings customer of Shawbrook Bank since 2019, adopting the Bank’s Business Easy Access saving product.

Shawbrook Bank has a range of solutions to suit the needs of microbusinesses and individuals across the UK. It offers easy access, notice accounts and fixed rate bonds to business customers and, as of 30 June 2021, its customer savings reached 7.8 billion.

For more information about business saving accounts, please visit: https://www.shawbrook.co.uk/direct/savings/business-savings/

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