Through a recent survey of over 1,100 small business decision-makers across the UK, Novuna Business Finance, the asset finance provider, found that 35% of Scots firms anticipate growth in the coming months, more than their counterparts in England (32%) and Wales (27%). The percentage of 35% is the highest figure in the last five quarters, and is similar to levels seen pre-pandemic.

Additionally, the rate of Scottish businesses expecting a downturn is relatively low. Only 16% foresee moderate or severe contraction in the next three months, with these figures lower than those from England (17%) and Wales (19%), as well as the three-year average of 19% since the pandemic’s onset.

In a bid to drive growth, 71% of small businesses across Scotland are currently implementing targeted initiatives, including cost management activities such as reducing fixed costs (67%), enhancing cash flow (30%), and more rigorously pursuing overdue payments (18%).

Relatedly, there’s been a marked uptick in businesses planning to purchase new equipment, nearly doubling from 12% a year ago to 23% now. The data also uncovered a noteworthy rise in businesses relocating to larger premises, up from 9% to 14%. Recruiting new staff also increased, climbing from 16% to 20%.

In terms of funding, the proportion of businesses looking for financial backing through a partner or company rose from 9% last year to 15% currently. Meanwhile, 11% said they were re-evaluating their financial commitments — which is flat on a year ago (Does this mean the same as a year ago?).

The prospect of driving further growth through overseas expansion remained comparatively low at 11%. The figures were more robust in 2016 and 2017, where the rate hovered between 25% and 28%, suggesting that the repercussions of Brexit have had a disruptive impact on Scottish firms’ international aspirations.

Notably, the Scots respondents said that their continued adoption and usage of technology has further bolstered the business efforts, with 25% stating it has allowed them to be more competitive in pricing (up from 11% in 2021), cut overhead costs (28%), enhance time management (35%), and offer faster services (33%).

Speaking on these findings, Jo Morris, head of insight at Novuna Business Finance, said: “Our tracking research highlights the resilience and adaptability of Scottish small businesses, even in the face of economic challenges. These findings offer a clue about what might be an uplift in the overall proportion of businesses reporting growth during the autumn and winter months.”

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Earlier this week, DIGIT covered a separate report from Grant Thornton UK LLP, the professional services network, which found that cost pressures — including rising interest rates and higher costs — are impacting mid-sized Scots businesses to a slightly lesser extent than seen on a UK-wide level.

For instance, the firm’s research found that 35% of Scots mid-market firms have frozen salary increases, a further 43% are planning to do so, and over half (51%) have also frozen workforce bonuses.

However, 52% of UK mid-sized firms have frozen salary increases, and a further 36% are planning to do so, with almost half (48%) also having frozen workforce bonuses.