Entrepreneurs still bullish despite economic downturn

A new survey conducted by Deloitte suggests that the UK's entrepreneurs remain confident about business growth despite the current economic uncertainty.

The survey, "Entrepreneurship UK: 2008", conducted by the business advisory firm, offers an insight into the mindset of the country’s entrepreneurial business talent and suggests that entrepreneurs are bullish about their future with 45% predicting revenue growth in excess of 20% in the coming year.

Despite the bullish approach, over half of the entrepreneurs surveyed believe they have been adversely affected by the credit crunch, reporting a decrease in demand for products and services as well as tightening of lending policies by their bank. However, a resilient 17% believe their businesses are sufficiently robust to experience no impact from the change in business environment at all.

Tony Cohen, head of entrepreneurial business at Deloitte, said: “While we may be facing challenging economic times, we are seeing entrepreneurial businesses employ a range of strategies to remain highly competitive and deliver on their confident expectations.

“Increasing focus on new product and service development, undergoing a phase of internal consolidation before growth and outward expansion, and entering new offshore markets, albeit primarily within the more established western economies of Western Europe and North America, are all regarded as being key to future revenue growth.

The main barrier to achieving strong business growth is considered to be a shortage of quality people. This issue has prompted over 25% to make recruitment and training quality people their single greatest financial investment in the next 12 months.

Cohen added: “In spite of the numerous challenges to entrepreneurial businesses, such as the credit crunch and a lack of quality talent, the relentless thirst for growth and aspiration to yet higher performance is telling within the sector.”

According to Deloitte’s findings, technology, media and telecommunications (TMT) businesses are the most positive, expecting an average of 26% growth in the next year and 111% in the medium term.

While within the consumer business sector – in spite of its position as the least optimistic of the eight industries surveyed – revenue growth is predicted to increase by 18% in the short-term and 48% over the forthcoming three years, demonstrating solid growth projection, albeit at less than half of that anticipated by TMT firms.