RISING costs are the biggest barrier to growth for the north's small and micro business sector, threatening the very existence of many.
And this is compounded by the fact only a third of these firms are seeing an increase in profitability, with one in 10 fearing the situation is so dire that they will have to close.
These are among findings in the fifth annual Enterprise NI barometer, which took the views of 850 micro, small, and self-employed businesses based across the north in towns (44%), cities (27%), rural areas (20%) and villages (9%).
The full findings of the 2023 barometer, supported by the British Business Bank, are being launched today at the Dunadry Hotel in Antrim, and for the first time it offers a breakdown for each of the north’s 11 council areas.
Over half (52%) of those surveyed believe cost pressures are impacting the future sustainability of their business - which Enterprise NI chief executive Michael McQuillan said is “extremely worrying”.
He also insisted that Northern Ireland urgently needs its first dedicated entrepreneurship strategy, adding: “This barometer is the biggest deep-dive into small and micro businesses and self-employment in Northern Ireland, so it is vital its findings are used to shape any future strategy.”
Some 86% of respondents voiced real concern about increased energy costs in the next year, and even more (88%) worry about the costs of goods and services.
The cashflow position is weak for 30% of respondents and "critical" for 5%, while 63% of respondents increased wages over the last 12 months while 9% actually cut salaries.
As well as the cost of doing business, the survey (full details at www.enterpriseni.com) looked at people/skills, the region's transition from the EU, and firms' attitude to exporting.
Mr McQuillan added: “Small and micro businesses are the backbone of the Northern Ireland economy and at the very heart of our communities here.
“And while this year's survey has shown that more owners have a positive view, with increased confidence and ambition for growth, sadly the reality for many is they will continue to be challenged in profitability because of the cost of doing business and lack of access to appropriate finance and support. We cannot let that happen.
“With 77% of respondents to the survey having sought some form of business advice or support in the last year, we can see there is a real need for further specific assistance for these businesses. There is also a massive, untapped opportunity, to grow local businesses outside of NI and this cannot be ignored.
“I'm delighted Enterprise NI, and our vibrant network of 27 local enterprise agencies, are delivering all of the pre-start, start-up, and early-stage strands of the new Go Succeed programme, and that we are the main delivery force in the growth and scaling strands.
“But the very clear picture from this year’s barometer findings is that our micro and small businesses need more bespoke support that is easy to access - as well as the region urgently needing that dedicated entrepreneurship strategy.”
Economist Maureen O’Reilly, who assessed the barometer findings, said: “Amid the emergence of some business confidence in headline growth for the forthcoming year, there are some striking concerns. The escalating costs of doing business threaten to undermine profitability and cost competitiveness, which could frustrate the strategic growth plans of numerous enterprises and threaten the survival of others.
“The survey also underscores a critical issue that must be addressed if we are to build any sustainable growth back into our economy and that is businesses own assessment of the alarming gaps in productivity-related skills and development.
“Failure to bridge these gaps poses a substantial threat to the competitiveness of countless businesses, potentially hampering their ability to thrive in an increasingly demanding market landscape.”
Scott Wylie, co-founder of Sevenvideo.io, a technology company based in Ledcom’s Work Cube space in Ballyclare, spoke about his experience in accessing support for his micro-business.
He said: “From the outset, Enterprise NI and Ledcom knew the type of support we needed and what would make a real difference to us. As well as the fixed-price all-inclusive office space, they knew the challenges we would face as a micro business wanting to market our services globally, and through empathetic mentoring and informed signposting have really helped us.
“We work with clients everywhere from Boston to California and Canada. We hear a lot about the government support given to large multi-national companies to locate here, but the barometer’s findings are crucial in ensuring smaller business owners are given the specialised support we need to be able to succeed.”
