West Midland small businesses are digging in their heels against a tide of market pessimism, it was claimed yesterday.
The sector remains confident about sales and profit growth for the year ahead, according to the second NatWest and RBS Small Business Monitor. Whilst the issue of capital gains tax reform has loomed over SMEs for months, the research maintains this is not their No1 concern.
Steve Pateman, chief executive, NatWest and RBS Business Banking, said: "There has been no knee-jerk reaction to sell businesses to avoid proposed tax increases. Staying ahead of the competition remains the chief concern ahead of Government legislation and red tape."
Optimism for performance growth runs across West Midland small businesses with over a third (36 per cent) expecting sales to increase despite only 16 per cent seeing a rise in 2007.
Across the sectors confidence is greatest in hotel, restaurant and construction, with more than half in each expecting higher sales.
Uplift is also expected for profit margins. Whilst 16 per cent actually experienced a fall last year, 13 per cent are confident of a rise this time despite market scepticism.
More welcome good news for the economy is that 10 per cent of small businesses expect to take on more staff.
Whilst historically red tape has been the main issue for those running a small business, competition is cited as their chief concern.
Mr Pateman said: "It is encouraging that businesses continue to be concerned about problems they can actually do something about. This displays good business sense on their part, no business can afford to take their eye off the competition."
On CGT there appeared no rush to sell up - only five per cent against a national average of seven per cent were planning to sell to escape higher tax.
Whilst the news sent nothing more than a ripple across the industry as a whole, waves were seen in certain sectors, particularly hotels where almost one in four were planning to dispose of their business as a result. That was followed by transport and communications - 12 per cent each. Mr Pateman added: "The Dragon's Den type of serial entrepreneurs who see their business as a golden goose are a minority. Most are in it for the long haul and view their business as their livelihood, so it's no surprise there was little reaction to sell in response to the proposed CGT reforms."
The survey claims Britain's entrepreneurial spirit is alive. Finding a potential market opportunity still remains one of the main reasons for staring up. Sectors attracting most new business in this fashion are healthcare/social work (30 per cent) and property (27 per cent).
This remains second only to the desire to have control over one's own destiny as a motivation.