Posted: Wed 8th Mar 2023
More than half of Irish small business owners expect to expand in 2023, a 24% leap in ambition on the previous quarter, according to the latest results from Enterprise Nation's quarterly Small Business Barometer.
The report, which analysed responses from more than 1,000 micro and small businesses across the UK and Ireland, showed Ireland was the growth outlier, with 63% expecting to expand this year.
The positivity was despite 88% of Irish small businesses saying they are being impacted by rising costs and 46% admitting profitability will take a hit due to cost pressures.
Finance and staff
More than three quarters (81%) of founders are planning to invest by accessing finance. Businesses expect to take on an average of €71,441, a 22% increase on the third quarter of 2022 and 14% above inflation.
A third (35%) of respondents said they were planning to employ new staff.
Emma Jones, founder of Enterprise Nation, said:
“Small business optimism is back! As we head deeper into 2023, it's clear small businesses are beginning to redesign the future and planning for growth again. They are grasping technology; they are innovating, and they are planning to invest.
“What needs to happen now is for the government to catch up with this ambition to make sure the infrastructure is in place, the funding is accessible and affordable, and the skilled workforce is ready to go.
“We must also ensure SMEs have the skills in leadership and are finance-ready to ensure they can succeed and offer targeted support to regions and sectors that are falling behind."
Rising costs and other challenges
Despite the positive news, small businesses are still struggling with various challenges. Two fifths said financial help with energy prices would be the best support the government could offer right now.
Many have been forced to recoup their costs with 44% putting up prices by between 11% and 20%, higher than the average in the UK of 34%.
They are also working longer hours with a typical working week of 54.5 hours, higher than the 50 hours UK average. This is despite the biggest reason to start a business being to achieve a better work/life balance (47%). Only 31% said they wanted to earn more money.
Late payment continues to be a problem with 32% saying they are often paid late by clients and customers. The figure is a slight decrease from 37% in the last quarter.
Almost a third of business owners said they also had a full or part-time job in addition to their company, suggesting many Irish entrepreneurs are operating as a side hustle to increase their income.
Founders aged between 25 and 34 were most likely to be running a side hustle.