OCTOBER 2017
Health of UK SMEs rises to 18-month high
n The health of small and medium- sized enterprises (SMEs) in the UK has risen to its highest level since the end of 2015, according to the SME Health Check Index.
The index – which is compiled by the
Centre for Economics and Business Research (Cebr) in association with CYBG, owner of Clydesdale and Yorkshire Banks – measures business performance and the macroeconomic operating environment aff ecting SMEs. These include bankruptcies, business costs, capacity, confi dence, employment, gross domestic product, lending and revenue. In the second quarter of 2017, UK SMEs have seen an improvement in six of the eight key performance indicators. This was helped by increased lending to SMEs and a falling number of business bankruptcies. In addition, business costs faced by SMEs seem to have almost plateaued during the same time, which is a welcome development for companies. The report suggests SME confi dence
remains higher than it was throughout the whole of 2016, adding to hopes that the UK economy will pick up some pace throughout the remainder of the year. Regionally, eight of nine English regions,
alongside Scotland, Wales and Northern Ireland are shown to have made some improvement in their index score, with the North East, Wales and East Midlands topping the rankings. The largest rises in the regional index
were seen in the West Midlands and Northern Ireland. Only Yorkshire and the Humber experienced a slight dip in Q2 of 2017, with capacity, confi dence and employment levels all taking a knock. Scotland’s SME Health Check Index has improved markedly since the fi rst quarter, with accelerated employment growth, increased lending and improved business confi dence.
Graeme Sands, head of business banking at CYBG, says: “At Clydesdale and Yorkshire Banks, we understand the importance of SMEs to the UK economy and the varying challenges businesses are facing, particularly given our experience in the north of England and Scotland. “Despite the uncertain political and economic environment, rises in the index this quarter show that there are still opportunities for SMEs to grow and thrive, and we are committed to supporting businesses to develop and achieve their potential.”
DID YOU KNOW
DID YOU KNOW
£15.1billion to the UK economy
Franchise businesses contribute
? Source: The bfa/NatWest Franchise Survey 2015 ?
Comment How quickly can I expect to make my money back?
Well, that depends on each franchisee – if you put the eff ort in the rewards are there. Obviously, for franchisees who invested a larger amount, it will take longer to recoup their initial investment. However, having a long- term sustainable business is invaluable and will hold you in good stead for years to come. Diff erent franchises will have
diff erent rates of return and, even within the same network, the return on investment (ROI) may vary. Buying a franchise is about the long term and about producing a sustainable capital asset that you can sell in the future. So, while ROI should
be considered, so should the ongoing revenue and the development of this asset. You should not seek to recover the investment in a short period of time – looking for an instant return on your stake will only serve to create short-term fi nancial pressures when you should be concentrating on building the business. When writing a business plan, through which you can anticipate return, you should speak to the franchisor and ask them for their own assumptions and fi nancial predictions, as well as talk to a number of franchisees and review their trading performances. This will give you a rough model from which to work. Remember, this is an investment!
Carol Stewart-Gill is the chairwoman and founder of Dublcheck, a commercial cleaning franchise
October 2017 |
BusinessFranchise.com | 13
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