Owner-Managed Businesses remain confident in growth despite economic challenges
Our latest survey, among corporate finance advisers, reveals that despite a dip in business confidence following the Autumn Budget, sentiment amongst owner-managed businesses in the UK is mixed, however, there is a level of optimistic with many believing the business environment will improve in 2025.
Despite a slowdown in deals towards the end of 2024, over half of advisers attributed the dip to a pre-budget spike in activity, a mismatch between owner expectations and offers, and tough trading conditions. Most advisers expect the negative effects of the budget to ease in early 2025, with an uptick in deal activity as businesses adapt to changing market conditions.
Additionally, 40% believe deal volume will increase in the first half of 2025, and 44% expect market conditions to remain stable. This reflects confidence that growth opportunities still exist, despite challenging times.
While there are continued concerns around the health of the UK economy and the growing tax burden, confidence in deal activity has not waned. The clear timeline and measurability of costs have enabled businesses to prepare and mitigate the impact through cost adjustments.
As the number one debt provider across the UK (full year Experian report, covering UK M&A transactions for 2024), we remain focused on growth within the SME space and look forward to helping more businesses thrive this year.
The forthcoming tax changes alongside a broader negative mood about the economy does mean that some companies are looking to pause investments or reduce headcount. There are some sectors, especially those reliant on consumer spending, who will be especially affected. However, based on our own conversations and pipeline, these are challenges that businesses will look to overcome, and we can see from advisers that activity is beginning to pick up. Despite current uncertainty, the appetite to invest and grow remains strong. Owner-managed businesses have shown resilience throughout, and we are confident the market will bounce back as SMEs continue pushing forward with their growth ambitions.Mike Hackett, Chief Commercial Officer, ThinCats
