Nearly three quarters of small businesses say they are merely surviving, rather than thriving, according to research.

Fewer than one third of small businesses have enough cash in hand to be able to keep their businesses afloat for more than six months, while 58 per cent have not invested in their business over the past year because of economic instability.

More than one third of small business owners have taken a salary cut just to keep their business afloat.

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Nearly half of small businesses (46 per cent) have seen turnover decline over the past 12 months, and nearly everyone has seen costs increase.

On the positive side, nearly half of small businesses (46 per cent) are already employing artificial intelligence in their business, with 60 per cent saying they are excited about it.

Unveiling his SME State of the Nation Roundtable Report, supported by NatWest Business, retail entrepreneur and Dragons’ Den investor Theo Paphitis said: “This eye-opening report has made me even more fervent in my belief that SMEs are the cornerstone and lifeblood of our economy, and that the challenges and opportunities they encounter impact us all.

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“This report has illuminated just how much strain they are under – whether that be the result of across-the-board cost rises, unnecessary red tape arising from Brexit, an inability to access finance or a lack of confidence amongst entrepreneurs arising from the prevailing macroeconomic situation.”

Commenting on the enthusiasm for AI among small business owners, Paphitis added: “The advent of AI provides an unparalleled opportunity to level the playing field between SMEs and their larger counterparts, ultimately fostering development and empowering small businesses to think big.”

Paphitis’s SME business network #SBS Small Business Sunday has 4,000 members and regularly hosts events to support independent entrepreneurs.

Further reading

Theo Paphitis: ‘My school showed me the door at 16 because I was a lost cause’ – In this podcast episode, Anna Jordan meets Theo Paphitis, a businessman, retail expert, shopkeeper and former Dragon