Some 39% of South West entrepreneurial businesses are forecasting double-digit growth over the year, led by organic and new product development, while 38% are stockpiling cash, according to the latest entrepreneurship survey by business advisors Deloitte.
Despite the ongoing economic instability, the survey reveals that 56% have achieved revenue growth in line with or above their projections for the year while only 11% say they fell significantly short of their revenue targets.
Optimism remains strong with nine in 10 expecting to grow their business over the coming 12 months and just 10% projecting zero or negative growth.
Over the next three years 90% forecast double-digit cumulative revenue growth and 30% are projecting growth to exceed 50%.
Sam Hart, Deloitte’s entrepreneurial business leader in the South West, said: “From first-hand experience, it’s clear how important their growth is to the South West.
“The Government has also recognised their invaluable impact in underpinning the economy, most recently with the announcement of an Enterprise Zone in Bristol.”
A third of South West entrepreneurs say organic development will be their main growth strategy over the next 12 months while 28% will rely on the development of new products and/or services. Some 17% will focus on entering new markets with 67% doing this within the UK, while 10% look to the US and 4% to China. Just 4% are considering mergers and acquisitions as the main way of growing their business and 10% plan to strengthen their management team.
In terms of development capital, just over half will use cash generated from their business as the most likely source to grow while a quarter will source it from a bank. Cash has been ‘actively’ stockpiled by 38% while 73% believe their bank has met most or all of their needs over the last 12 months.
Sam Hart added: “Ever since the credit crunch and the subsequent financial crisis reduced financial options for businesses, entrepreneurs have been waiting for lending conditions to improve. Although they now feel better served by banks, it’s telling that a significant proportion are still stockpiling cash.”
Now in its fourth year, the Deloitte Entrepreneurship UK: 2011 report gathers the views of entrepreneurs from across the UK to offer an insight into the mindset and intentions of the people who run the dynamic entrepreneurial companies that underpin the economy.
