Recent UK research showed that almost 6 in 10 ethnic minority-owned businesses (EMBs) have ambitions to both grow and take risks, significantly higher than the overall percentage of SMEs nationwide (27%).
A fresh independent research conducted by BVA BDRC for UK Finance shows that ethnic minority-owned businesses (EMBs) are much more likely than most SMEs to be willing to pursue growth opportunities, take risks to grow and trade overseas.
The report demonstrates lofty ambitions and a positive future outlook prevailing amongst EMBs in the UK. Namely, 65% of British EMBs have ambitions to be much bigger, and 73% are willing to take risks. Almost 60% of EMBs have ambitions to be both bigger and take risks.
The statistics stand in sharp contrast to the overall stance of national small businesses. Thus, only 43% of all SMEs are planning to grow, while a mere 27% of SMEs in general wish to both grow and embrace risks. In addition, EMBs are more likely to trade overseas when compared to UK SMEs in general (23% vs 19%).
The research has also shown that EMBs are more likely than most small businesses to hire more staff (37% vs 22% of all SMEs) or develop a new product or service (24% vs 17% of overall SMEs).
At the same time, EMB growth is mostly hindered by recruitment and retention of staff-related issues, increased costs, and issues with access to finance.
Therefore, EMBs are more likely to describe themselves as ‘struggling’ (30% vs 18% of SMEs overall). The percentage of business owners that felt their businesses were ‘well off / comfortable’ is much smaller among minority-owned businesses than in all SMEs (18% vs 33%).
The majority (79%) of EMBs interviewed were small and young businesses. As for the financial options they use for growth, 60% of EMBs have a high level of trust in their bank, while 40% of EMBs reported using external finance in the 18 months up to Q2 2023.
The results of the research are notable, taking into consideration the challenging economic outlook. As we have recently reported, the economy of the UK in October 2023 showed a contraction that turned out to be stronger than expected.
The downward economic situation is reflected in the financial situation of UK EMBs. In the 18 months to Q2 2023, EMBs in the UK were less likely than SMEs overall to have made a profit (56% v 75%).
