Call for NI entrepreneurship strategy after survey reveals cost worries for small businesses

A call has been made for an entrepreneurship strategy for Northern Ireland after small businesses expressed concern over costs.

It comes as 52% of micro and small businesses said they believe cost pressures are impacting the future sustainability of their companies.

Some 850 micro, small and self-employed businesses responded to the 2023 NI Enterprise Barometer by Enterprise NI.

The survey, carried out in September and October across all sectors, also found that one in five businesses that took part are currently contracting, with one in 10 saying they are in difficulty or at risk of closure, and that 38% of businesses have seen no change in profitability, while 26% have seen their profitability decrease.

Of the 850 businesses that responded to the survey, 27% are based in cities, with the rest based in towns (44%), rural areas (20%) and villages (9%).

Some 43% of respondents said they have seen turnover increase and there is growing optimism about future growth, with 54% of businesses expecting their top line to grow.

But in the next 12 months, 86% of businesses said they are concerned about increased energy costs and 88% said they are concerned about the increased costs of goods and services.

Some 30% of respondents said their cashflow position is weak, and a further one in 20 businesses said their cashflow position is critical.

The survey also uncovered concerns around filling vacancies as Northern Ireland's employment rates approach record levels. One of three businesses indicated they have job vacancies and 76% cannot fill these roles.

In terms of Brexit, the survey suggests micro and small businesses have not fully returned to their pre-Covid and EU exit performance levels.

In 2019, 52% of local micro and small businesses said they were growing over the previous year, while in 2023 the figure stands at 44%, up from 29% in 2022.

Asked about the impact of Brexit on their businesses, 49% of respondents said they see Northern Ireland's dual-market access to GB and EU markets as a business opportunity, while 24% do not.

A further 27% said they do not know what dual-market access means for their business.

The number of businesses reporting some challenges with the movement of goods from GB to NI dropped from 85% in 2022 to 71% in 2023. Some 56% of businesses said they have had some challenges with the movement of goods from the EU (non-ROI) to NI, while 44% have had challenges with access to non-UK workers.

Michael McQuillan, chief executive of Enterprise NI, said: "The fact that 52% of the micro and small businesses who took part in the 2023 NI Enterprise Barometer believe cost pressures are impacting the future sustainability of their business is extremely worrying.

"This concern is compounded when we see that only 36% of respondents to the barometer reported an increase in their profitability in the last year and that 20% are seeing their business contract, with a further 10% saying they are in difficulty or at risk of closure.

"Small and micro businesses are the backbone of the Northern Ireland economy and that is highlighted by the fact that 73% of our respondents are now operating outside of our main cities in Northern Ireland."

Mr McQuillan called for a dedicated entrepreneurship strategy for the region.

"As the NI Enterprise Barometer is the biggest deep dive into small and micro businesses and self-employment in Northern Ireland, it is vital its findings are used to shape this," he said.

"The rich seam of data we now have can help inform the types of policy and equitable support that will address the specific business needs of micro and small businesses, and ensure we are in a position to achieve our vision of a 10x economy by building a strong and flourishing culture of entrepreneurship right across Northern Ireland."