Woman SMB Image credit Pixabay/TumisuSage has published a report based on survey findings from over 13,000 SMB decision-makers from eleven countries. At twenty-two pages in length, the report looks at how SMBs have perceived business during and post-pandemic. It identified four key findings

  • Over a third of SMBs are not operating normally because of the pandemic
  • 9% are being left behind and are at serious risk of going out of business
  • 69% of businesses feel confident they will be successful in a year
  • The adaptors, 27% of those polled, have identified five changes that have prepared them for success.

The report itself is divided into five main sections.

  • It looks at the barrier that remains still for SMBs.
  • The optimism that many SMBs are feelings
  • An analysis across different countries of growth expectations
  • Optimism is not universal; there are variances
  • A look at four SMB segments Sage identified: the adaptors, the COVID Generation, Resilient and those left behind.

Finally, it delivers a further breakdown from each country, highlighting some of the key findings from each. What is notable is the survey segments were notable, with the US and the UK polling 2,000 leaders, Singapore 500 and the rest at least 1,000. Each of the findings, therefore, holds merit.

Steve Hare, Group CEO Sage Group PLC (Image credit Sage Group PLC)
Steve Hare, Group CEO Sage Group PLC

Steve Hare, the CEO, commented, “It’s no surprise to me that Sage’s “Small Business Big Opportunity?” report highlights that the pandemic has changed SMBs for good. They have emerged tougher and ready to face the future. 65% of SMBs globally are optimistic about the success of their business right now, rising to 69% when thinking about their business in 12 months, while the majority say that their business coped with the barriers they face well (59%).”

Barriers remain

SMBs are the driving force behind many global economies, and they have several concerns. 34% see the inability to operate normally because COVID hinders their business. What isn’t clear from this report is which industries were most affected. Sage will likely use more of these figures in a later report.

Of bigger and potentially growing concern is increasing costs (31%). With inflation rising and wages increasing determined two big factors. With the uncertainty of Ukraine, that challenge is not likely to disappear. Other concerns include:

  • Reduced demand 23%
  • Supply chain disruption 20%
  • Cash flow 19%
  • Lack of government support 19%

Only 14% perceived cyber security incidents as negatively impacting their business. The question might have been better phrased to understand how many customers feel it is an issue. More than 50% see technology helping to overcome these barriers. It might have been useful to have a qualitative element to explain why that is the case. It would apply to some challenges, but perhaps not all.

On Optimism

Optimism is increasing. Twelve months ago, only 58% of SMEs were optimistic, 65% are optimistic now, and 69% are optimistic about 12 months. 81% expect profitability to return to pre-pandemic levels within 12 months. The top four factors for this optimism are:

  • Increased customer base 45%
  • Quality of staff 42%
  • Increased cash flow 34%
  • New technology adoption 28%

However, optimism is different across sectors with personal services (58%) and transport/logistics only 57% very or somewhat confident. Again, a qualitative interview might have shed some insights on this. Why are personal services fearing a downturn? Is this because they are services that tend to get cut first? Is transport less optimistic because of competition from more efficient operators and consolidation in the supply chain or something else?

The most optimistic countries who responded very or somewhat confident about business 12 months from now were:

  • South Africa -80%
  • Spain – 75%
  • The US – 73%

Perhaps, surprisingly, Germany polled lowest with 57%.

The four segments of SME

As part of the analysis, Sage identified four different SMB segments.

  • Adaptors: Have coped well with the pandemic. They have made more changes than their competitors. The report highlights the increased use of technology and expansion of products and services
  • The Covid Generation: Launched during the pandemic, they have had significant barriers but are better poised for growth 57%, compared to 48% for others.
  • Resilient: they have battened down the hatches. They are only slightly more confident about their business (27%) than a year ago (26%). They often work in the technology or professional services sector.
  • Left Behind: Unable to operate their business during Covid, they fear the future. 23% already have cash flow issues, and 27% have reduced demand from customers. 54% believe the situation will be worse in 12 months.

Enterprise Times: What does this mean

The report is a fascinating study that goes into considerable detail and has several insights for SMBs. Some very interesting national variances will take time to emerge. However, the uncertain situation in Ukraine will likely impact the global economy that is unknown at present.

Covid is still present, and while Omicron is reaching New Zealand and Australia, restrictions are lifting across Europe, and a semblance of post-Covid normality is resuming. However, the landscape has changed for SMEs, and there are still several factors that will impact business shortly. There is also the risk of a new variant emerging.


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