A recent survey conducted by payment technology provider Dojo, which gathered responses from 500 UK decision-makers, reflecting spending across more than 10% of UK high street SMEs, indicates high business confidence among Small and Medium-sized Enterprise (SME) leaders in the UK, despite several years of economic strain. The survey found that 60% of these leaders are anticipating revenue increases over the next 12 months and many of these include hospitality businesses with Edinburgh-based Maki & Ramen launching four new locations, with plans for four more in 2024, supported by Dojo.
This high level of confidence comes even as SMEs have faced a myriad of difficulties due to the Covid-19 pandemic, the cost-of-living crisis, and ongoing economic volatility. Despite this, 65% of SMEs are optimistic about the UK’s economic outlook, 63% expect the end of the cost-of-living crisis, and a striking 79% are confident about the future of their own business. Of the business leaders surveyed, a significant 60% expect their revenues to increase in the next 12 months by an average of 22%, while 24% expect revenues to remain stable.
The survey also suggests that consumers are spending more money out and about, according to Dojo’s spending data the average number of card transactions per location increased by 10% between January and June compared to the same period last year. This increase is notable as it occurs in a context of high inflation and rising interest rates and suggests growing consumer confidence, as well as business investments in payments infrastructure.
Jon Knott, Head of Customer Insight at Dojo, commented on the resilience and adaptability of UK SMEs, saying, ““Growing businesses on the high street have been forced to weather all manner of unpredictable storms over the last three or so years – so it’s a testament to them that so many are confident of delivering growth in the current economic climate. With the right strategic investments, SMEs will be best-placed to continue improving the experiences they deliver for customers, supporting continued growth.”
The survey also highlighted the growing recognition among SMEs of the need for strategic investments in technology, payments, and digital infrastructure to navigate these challenges. About 64% of respondents admitted needing to invest in better services to fulfil their business potential, and 53% agreed that their current technology and digital infrastructure is hindering their business growth.
As mentioned, one such example is independent restaurant chain Maki & Ramen, who works with Dojo. Despite economic uncertainty, the business, which recorded £10m in revenue in 2022 (a 48% year-on-year growth), successfully launched four new locations over the last 12 months and plans to open four more in 2024. Maki & Ramen saved £40,000 borrowing from Dojo to fund its expansion, with new restaurants set to open in Glasgow, Leeds and Manchester.
Michael Salvador, COO at Maki & Ramen, who uses technology provider Dojo, said, “Having access to flexible funding means we can manage our cash flow, which allows us to cover admin costs or relocate staff, while continuing to execute our expansion plans. Traditional borrowing options were completely unsuitable. With Dojo, repayments are linked to your revenues, so when you’re doing well, you can pay down the borrowing quickly.”
Despite the optimism, business leaders acknowledge potential hurdles, including growing revenue (43%), geographic expansion or opening new branches (36%), and broadening their product ranges (33%).
“In today’s cost-of-living crisis, going out costs more – and consumers rightly expect more for their increased spend. Businesses must therefore invest in the right technologies, from superfast payments to access to data and insights, to ensure their people are enabled to deliver the best possible value and experiences to meet this heightened expectation,” Knott added.