Entrepreneurs are more focused on surviving than growth this year, according to an annual survey by business advisors Deloitte.
After questioning 300 entrepreneurs from across the UK, it found that a fifth of firms expect to see no revenue growth in their business this year, up from 7% who were similarly pessimistic a year ago. Just 12% of businesses forecast growth of more than 50% in the next 12 months, down from 21% last year.
David Crawford, a partner at Deloitte Belfast, said: “We are in the midst of exceptional times and the recession has exposed just how much room for improvement there is in many businesses. It really hits home when 98% of the entrepreneurs who completed our survey say a competitor would be able to spot weaknesses that would allow them to take a market share.
“In order to stand out from the crowd, entrepreneurs need to make some tough decisions now to be very much on the front foot when market conditions do improve.”
Mr Crawford added: “The opportunity is ripe not just to cut, but to replace one cost with another that is more productive. However, many businesses are not cutting costs, so they are limiting their chances of increasing their revenues by not making improvements.
“Cost reduction, as the quickest and simplest way to bolster the balance sheet, is a priority.
“All of which means the expansion of the business — the driver of revenue growth — takes a back seat.”
Deloitte found that foreign expansion into potentially untapped markets had rapidly slipped down the list of priorities as entrepreneurs take a slightly more cautious stance and avoid any potentially costly drains on company resources in turbulent markets.
Nearly two-thirds (62%) of companies said the UK offers them the best opportunity for growth in the next three years.