This is at the expense of innovation, improvements and investing in the future, according to a quarterly study from Hitachi Capital’s British Business Barometer.
With companies restrained by red tape and regulation and stifled by the fixed costs usually associated with the nuts and bolts of running a business, the research highlights the fact that too narrow a focus on financial objectives may also be a factor in limiting their growth.
The importance of investing in the future of the business and innovation are very low in comparison to the financial angle (17 per cent and 37 per cent respectively).
The first quarter of this year has seen a slight shift in focus for growth, indicating perhaps that small businesses are feeling more positive about the future with an increased focus since Q4 2014 on hiring more people (16 per cent) and investing in new equipment for the business (13 per cent).
Perhaps in an acknowledgement of long-term sustainability and lessons learned over the last few years prudence is still very much in favour with the majority of companies still predominantly concerned with keeping better control over fixed costs and managing cash flow than any other area, when comparing the figures quarter on quarter.
Looking at industry sectors, manufacturing companies are focusing on hiring new people (26 per cent against only 15 per cent in Q4 2014) and streamlining the supply chain (12 per cent vs 8 per cent in Q4).
In construction, keeping fixed costs down is key to growth and is the biggest focus for the next three months, with improving cash flow less of an issue than last quarter (14 per cent vs 25 per cent in Q4).
Gavin Wraith-Carter, general manager at Hitachi Capital Business Finance says, ‘As the research states, the management of financial affairs is always the most critical role – and arguably becomes even more so when businesses are coming out of a recession mindset and opportunities start to resurface.
‘However, in order to achieve and sustain growth over the longer term, it is obviously essential to recognise the need for ongoing investment.’
Further reading on business financials
