A few weeks ago we published an article ‘We want to hear from you! Have your say on changes in the advisory market’ giving advisers the opportunity to participate in Smith & Williamson’s research study. The study (results to be published over the coming weeks) gave us insight into a number of key areas currently impacting advisers and their businesses.
Smith & Williamson view feedback from advisers as invaluable in enabling them to alter and improve their service offering to better aid advisers and their clients.
Not only do Smith & Williamson actively seek adviser feedback, they also take great interest in the views of business leaders and entrepreneurs, particularly how they react to political, economic and business events.
This is achieved via the Smith & Williamson Enterprise Index. The Enterprise Index is a quarterly barometer capable of testing the views of nearly 200 business leaders and entrepreneurs in response to current events.
A wobble in confidence
According to the Smith & Williamson latest Enterprise Index research, nearly four out five (78%) entrepreneurs are predicting growth over the next 12 months.
However, their Index also revealed expectations for the wider economy have plummeted. Just over a third (37%) expect the economy to improve over the coming year, down from 50% in the previous quarter.
This can be seen as a wobble in confidence. Entrepreneurs are naturally positive but are understandably less so as the consequences of the triggering Article 50 and the ramifications of the unexpected General Election result sink in.
Government, beware. Entrepreneurs are the lifeblood of Britain’s future. They need looking after, and would certainly benefit from fewer shocks. Uncertainty is not the businessman’s friend but, due to circumstances outside their control, it is the situation they face. The onus is on the government to change this, however perhaps the leaders of larger businesses need to start coming to the fore. SMEs face a challenging period and they need everyone to pitch in to ensure the United Kingdom remains the premier place to start, develop and scale-up a business.
Smith & Williamson’s Enterprise Index itself fell eight points to 103.9 (January 2013 = 100), as optimism in and entrepreneurs own abilities and business prospects failed to outweigh the negativity perceived across the wider business spectrum.
Avoiding a populist hangover
Belief in the government’s support for private enterprise remained low, with less than half (48%) of respondents believing Theresa May’s government had their best interests in mind. For the post-election respondents to the survey, belief dropped further still; only two out of five respondents believe government policy is supportive.
The General Election magnified the Labour Party’s populist policies, which many see as a threat to future stability and prosperity. Most business leaders understand whilst that a tax and spend approach may sound appealing, it is unlikely to generate anything other than a fleeting feel-good factor, followed by an unpleasant hangover.
Notwithstanding wider economic concerns, the Index showed nearly two thirds (63%) of respondents remained optimistic about their own prospects over the coming year. Over half (57%) of business leaders are expecting to increase headcount over the next three months.
Entrepreneurs are naturally enthusiastic and confident in their own abilities. Whilst this can occasionally lead to excessive exuberance, there is now a far wider understanding that entrepreneurs generate both jobs and wealth and the private sector has fostered a strong entrepreneurial ecosystem over the past ten years.
Cyber security planning well advanced
The Smith & Williamson Enterprise Index also reviewed respondent’s outlook regarding cyber security. Three out of five respondents said they had a developed cyber security plan for their business – an issue becoming more and more important following the recent cyber-attacks including WannaCry and Petya. (We also covered the requirements of GDPR in this article).
Small businesses need to have robust defences against cyber-attacks. It’s encouraging to see so many entrepreneurs taking this seriously. Even larger companies, as we saw in the press recently, struggle to have a fully developed and managed cyber security plan. This makes it all the more impressive so many SMEs are looking to get on top of this.
Do you have a similar outlook following recent political and economic events? Or is your outlook different? As always we enjoy hearing feedback so please add your comments below!