SMEs see turnover growth of £325,000 since 2019

New research from Aldermore’s latest SME Growth Index reveals that SMEs have enjoyed strong growth since 2019, despite the pandemic and the challenging economic environment in which they’ve had to manoeuvre.

On average, SMEs have seen turnover growth of £327,304 since 2019 – with £232,529 being reinvested back into their business to fuel further growth.

SMEs have also seen healthy customer acquisition over the last five years. Since 2019, the average SME’s customer base has increased by 59% and by a remarkable 52% in the last year alone.

Since 2019, SMEs have seen a 61% increase in headcount, increasing their workforce to meet growth demands.

SMEs take a more conservative approach to business investment

SMEs are reinvesting their profits back into their businesses to fuel further growth. On average, SMEs are looking to invest £232,539 in growth strategies over the next 12 months. However, investment appetite is slightly subdued when compared to last year, with businesses planning to invest 28% less (£321,048 in 2023) – as ongoing inflationary pressures and geopolitical headwinds potentially hamper investment appetite.

Where SMEs are putting their money

Over the next 12 months, SME leaders want to grow their business (46%), expand their customer base (39%), and reduce costs (34%).

In order to achieve these goals, a third of businesses are investing in their online presence (32%), training for staff (32%) as well as investing in new equipment (31%). This is largely consistent across business sizes, however amid the global AI boom, medium-sized businesses are acutely focused on investing in new technology to improve efficiencies and unlocking additional opportunities for their business (47%).

Barriers to SMEs growth

While SMEs continue on their growth journey, the biggest barrier over the next 12 months is high inflation (34%) followed by high energy costs (32%), which continues to eat into bottom lines. A quarter are also concerned about the rising cost of materials (27%) while high interest rates (24%) continue to hamper growth prospects.

“Despite this, SMEs have shown themselves to be resilient, enjoying healthy financials and strong customer and headcount growth.

“While SMEs may be investing less than they did last year, it’s encouraging to see businesses remain focused on enhancing and expanding their operations. While it may be uncharted territory for SME leaders who are scaling their business and unsure how to fund their growth, there are a number of business finance options available, which can help support them in this journey.”