Confidence among UK small business owners remains strong in 2025, with nearly half reporting improved performance compared to 2024. Although optimism slightly dipped, the number lacking confidence significantly decreased. Rising costs, particularly for materials and energy, are major concerns. Many have noticed a decline in customer spending and face challenges in maintaining loyalty due to increasing competition. To cope with economic pressures, a large majority of SMEs have implemented strategic changes.
Confidence among UK small business owners remains strong in 2025 despite rising costs and economic uncertainty. Nearly half reported stronger business performance this year compared to the last.
Rising costs are the primary concern for small business owners, with 47% citing increased prices for raw materials as a significant challenge, making profit margins difficult to maintain.
Over one-third of business owners have observed a drop in customer spending and are concerned about retaining loyalty, with competition increasing from cheaper alternatives.
Despite slight declines in overall optimism, the percentage of business owners lacking confidence has significantly decreased, dropping from 9% last year to just 3% in 2025.
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