Confidence levels amongst Britain's entrepreneurs have taken a knock during the course of 2007, according to the latest study.
Tuesday, December 18, 2007
The latest results from Small Business Confidence Index by Bank of Scotland Business Banking, which measures small business optimism across five key economic areas reveals a sharp fall in small business confidence levels of six points since April.
A decline in the overall confidence indicator is reflected in key findings from the research which reveal that only a third (33%) of small business owners believe that now is a good time to be running a small business in Britain, compared to nearly four in ten (38%) who think the opposite.
More than six in ten (63%) small business owners now expect general economic conditions to worsen over the next twelve months – an increase of 24 percentage points on the number expressing a pessimistic outlook in the third quarter of 2007.
Ivan Matviak, Head of Bank of Scotland Business Banking believes that the recent ‘bad press’ regarding the economy, including the run on Northern Rock and the credit crunch, has filtered down to Britain’s small business community.
“Whilst there are still some healthy growth expectations amongst a significant proportion of these owner managers, the vast majority are undoubtedly taking a more cautious approach when assessing both their own business prospects and the outlook for economic conditions over the coming year,” he said.
“These findings suggest that we can expect recruitment to be measured and growth to be steady but slowing.”
Given the uncertainty surrounding current market conditions, nearly half (45%) of entrepreneurs are nervous about the prospects for small business in Britain. Only a quarter (25%) remain confident.
With optimism varying more by location than sector, small businesses in Scotland will end the year as the most optimistic about their future and the general economic climate, whilst businesses in Yorkshire and the West Midlands end the year as the most pessimistic with a score of 39.
Small businesses are also likely to be hit by increases to Capital Gains Tax (CGT) announced in November’s pre-budget report. The increase in CGT to 18% from April 2008 could hit the investments of those who have built up a small business, hike the tax bills of the 1.7 million employees in share ownership schemes, and discourage business angels and venture capital funds from investing for the long game.
“Faced with a growing tax burden and an impenetrable maze of red tape, businesses will have to continue operating in a regulatory and fiscal environment that offers very little support or encouragement,” concludes Matviak.
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Source: http://www.financedaily.co.uk/showNews.aspx?loadid=00815 | 
