Sage survey of over 13,000 companies reveals strong long-term growth

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ATLANTA, March 04, 2022 (GLOBE NEWSWIRE) — Small and medium-sized enterprises (SMEs) — which account for two-thirds of global jobs and more than half of global GDP — remain resilient and confident in the face of today’s market challenges. However, these companies warn of rising costs and the need for increased government support and better financing options to deal with these conditions over the next twelve months.

That’s according to a new study commissioned by Sage, the leader in accounting, finance, HR and payroll technology for SMEs. Title Small business, big opportunity?, the report is the largest study of its kind examining how SMEs are surviving and thriving despite current public health, economic and societal challenges, including the rising cost of living and the continued impact of the pandemic. Sage commissioned the study to examine SME confidence, surveying more than 13,000 businesses in eleven countries around the world to understand their experience during the COVID-19 pandemic and their outlook for the future.

Key themes that emerged from the study include:

  • SMEs are a key driver in overcoming global economic challenges, but they are not invincible and always face headwinds
  • The majority of SMEs believe that the aftermath of the pandemic can be an opportunity to promote more sustainable development
  • COVID-19 has unleashed a new generation of hardened entrepreneurs

Looking at the responses of over 2,000 US-based companies against the overall global average, the survey found:

  • Confidence among US decision makers is above average for the next 12 months, where nearly three-quarters (73%) feel confident about the success of their business – four percentage points higher than the global average (69%).
  • In terms of revenue over the next six months, SMB decision makers in the United States are more positive than the global average. A majority (54%) expect their income to increase, compared to just 49% globally.
  • In addition, 54% also expect to see their number of employees increase over the next year, which is significantly higher than the global average of 46%. This includes up to 22% who expect a significant increase, while only 13% of SMBs globally expect the same.

“The incredible contribution of SMEs to global prosperity, recovery and growth cannot be ignored. Likewise, their trust cannot be taken for granted,” said Steve Hare, CEO of the Sage Group. “Governments need to keep small and medium-sized enterprises at the forefront of decision-making and implement policies that break down the barriers that stand in their way so they can realize their potential.”

“If we leave out small and medium-sized businesses, we jeopardize the global economic recovery,” added Aziz Benmalek, executive vice president of Sage Partners and Alliances and interim president of Sage North America. “Whether it’s rising costs and inflation, skills shortages or lack of access to finance, we need to ensure that businesses at the heart of the economy receive the resources and support appropriate to survive and thrive in the coming year.”

Key global research findings include:

Rising costs and inflation worries are keeping businesses up at night

  • More than a third of businesses are still not operating normally due to the pandemic and now face the prospect of new challenges
  • About four in ten businesses (39%) expect rising inflation and cost pressures (including rising rents and utilities) to remain the top risks to their business in the coming months. coming year, which will have a significant impact on growth prospects
  • Nearly 10% of SMEs, representing more than 6.1 million jobs in the markets studied, are at risk of disappearing completely

However, business confidence remains strong globally, despite – and often because of – ongoing pandemic pressures.
Most businesses around the world feel more resilient and better prepared to overcome key hurdles now than before the pandemic due to the adaptations they have made during the period, including investing in technology

  • 69% of business decision makers are confident their business will succeed in 12 months, up from 58% who were confident this time last year
  • Optimism is starting to trickle down to profitability, with four in five SMEs (81%) expecting to return at least somewhat to pre-pandemic profitability levels
  • By sector, the companies most optimistic about their success in 12 months are in the non-profit, healthcare, education, financial services, construction and technology sectors

SMBs plan to increase hiring and remain optimistic about staffing over the next twelve months

  • Almost half (46%) of companies surveyed plan to hire more people in 2022 – on average, SMEs expect their workforce to increase by 12%
  • This could lead to the creation of a potential 3.8 million new jobs, including 1.6 million jobs in the United States.
  • 35% of SMEs have seen their headcount shrink over the past year, but 65% are confident they will be able to meet their staffing needs over the next 12 months

Governmental and financial support is essential for business survival

  • Government support was identified as the most important resource to help SMEs grow over the next 12 months (31%), along with financing (25%), including bank loans and grants, and better management cash flow (25%). key factors of success
  • One in five pointed to a lack of government support as a key challenge over the past twelve months
  • Businesses that have received government financial support (21%) feel more resilient and better prepared than those that have not received funding

A majority want to seize the opportunity for more sustainable development

  • 86% of SMEs expect to make a change to become more sustainable in the coming year, with companies founded during COVID more likely to make this change
  • More than half of SMEs (55%) identified sustainability as important to their business, with 17% describing it as essential to what they do
  • Around 80% feel pressure to reduce their environmental impact, with pressure coming from customers (31%), government (25%), employees (24%) and the supply chain (22%).
  • A majority of SMEs believe that the consequences of the pandemic can be an opportunity to promote more sustainable development in their country and local communities

From the darkness, a new generation of confident business owners has emerged
Companies founded during the pandemic report higher than average barriers to success, but remain more confident about the growth they can achieve in the year ahead

  • 42% of companies created during the pandemic were created by young people (18-34 years old), with the main decision-makers being more often men (61%)
  • These ‘COVID generation’ businesses are much more adaptable, with less than a third saying the pandemic has had a negative impact on their operations
  • These “COVID generation” companies are more confident that they will generate revenue growth in the next six months (57%) compared to those founded before the pandemic (48%)
  • However, compared to companies founded before the pandemic, fewer “COVID generation” SMEs are satisfied with their current workforce (56% vs. 65%), their ability to recruit talent (51% vs. 58%) and productivity (58% vs. 68%)

Survey methodology
A specialist research team from Portland Communications conducted an online survey of 13,118 SME decision makers between November 25 and December 2, 2021. The markets included in this study are in the UK, US, France, Spain, Germany, Canada, Australia, South Africa, Portugal, Malaysia and Singapore. In each market, decision makers from companies employing less than 250 people were targeted.

Portland Communications online surveys are accredited by the British Polling Council. All data collected is of publishable quality.

Click here to access the full report and regional findings.

Media contact:
Peter Olson
peter.olson@sage.com
408-878-0951

About sage
Sage exists to break down barriers so everyone can thrive, starting with the millions of small and medium-sized businesses served by us, our partners, and accountants. Clients trust our finance, HR and payroll software to keep work and money flowing. By digitizing business processes and relationships with customers, suppliers, employees, banks and governments, our digital network connects SMEs, removing friction and delivering insights. Breaking down barriers also means using our time, technology and experience to tackle digital inequality, economic inequality and the climate crisis. For more information, visit www.sage.com/en-us/ and www.sageintacct.com.

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