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Smart Data Foundry, Sage, and Cebr launch their quarterly Small Business Tracker

27th June 2023, LONDON

Smart Data Foundry, Sage, and Cebr launch their quarterly Small Business Tracker that measures the financial health of UK SMEs

In an event that drew key players from government departments, third-sector organisations, media agencies, data companies, and private sector giants, Smart Data Foundry, Sage, and Cebr unveiled their much-anticipated quarterly Small Business Tracker covering the final quarter of 2022. This new report promises to provide unique insights that will transform how we understand the financial health of small businesses in the UK.

Its unwavering commitment to accuracy and scale sets the Small Business Tracker apart. Unlike traditional surveys that can suffer biases, this report is built on actual accounting data from over 120,000 small businesses. Its scope surpasses the usual approach to smaller-scale surveys, uncovering new insights about the financial health of the UK SME sector like never before.

The implications of this report reach far beyond its numbers. Through intense discussions at the launch, experts have suggested this may be a crucial barometer of the UK economy’s performance. Small businesses, known for their agility and responsiveness, act as early indicators of environmental shifts, making them invaluable in understanding broader economic trends. Often overlooked, these small enterprises form the bedrock of the UK’s business ecosystem, driving economic growth and fuelling employment.

Looking to the future, the creators of the Small Business Tracker are committed to continuous improvement. With every passing quarter, they seek to refine and enhance the report, ensuring its relevance and accuracy remain unmatched.

The headlines from the latest report:

Unleashing the power of profitability:

Small businesses have seen a double-digit increase in profitability, even though their revenue has fallen. In Q4 2022, the average real EBITDA growth rate was 19.7% compared to the previous year, following a 9.3% YoY increase in Q3. London reported the highest annual increase in profitability in Q4 2022, with a growth rate of 34.1%, across all twelve UK regions.

Taming the revenue rollercoaster:

Revenue moderately contracts in Q4 – average real revenues for small businesses contracted by 2.4% on a year-on-year basis in Q4 2022. Businesses were likely impacted by the wider economic slowdown in activity induced by high inflationary pressure on both the supply and demand side of the economy. Despite a contraction for the UK average, small businesses in Newport saw strong revenue growth in Q4 2022 at 23.3%.

Overheads in retreat:

After experiencing a dramatic rise in 2021 and early 2022, small businesses found respite in the fourth quarter of 2022. Average overheads began to decline, showcasing an annual drop of 1.9%. A glimmer of relief for the entrepreneurs!

Significant improvement in late payments:

Small businesses have dramatically improved late payment times since the pandemic – the average number of days small businesses were late in paying an invoice for those which were overdue dropped by 28.4 days between the start of 2018 and the end of 2022. Moreover, over the past five quarters, average days overdue has been falling at an increasing rate.

Navigating a challenging future:

Q1 2023 estimates expect revenue to fall, but contraction in overheads should support profit growth– more timely data from a smaller subset of businesses allows Cebr to estimate small business performance in Q1 2023. Results show that average revenue growth is projected to contract at the start of the year, likely due to struggling consumer sentiment amid a cost-of-living crisis. However, overheads are anticipated fall as price pressures on businesses come down from very high levels.)

In conclusion, the launch of the Small Business Tracker marks a pivotal moment in acknowledging and supporting small enterprises in the United Kingdom. Its detailed and precise analysis provides unparalleled insights and ushers us into a new era of comprehension. By utilising genuine accounting data and harnessing its potential, we can acquire a wealth of knowledge and improve our understanding of the small business landscape in the UK.

Access the tracker here

For more information on the Small Business Tracker, please get in touch with Rui Cardoso