The 10 biggest challenges facing small businesses in 2014

Business confidence blossomed at the end of 2013, and things have got off to a good start for firms this year too.

Figures from the British Chambers of Commerce showed that confidence in a broad-based UK recovery is growing, and net optimism flew to 71 per cent at the end of the year.

When it comes to small businesses, data is more scanty, but a survey from law firm Taylor Wessing has revealed that 84 per cent are either "confident" or "somewhat confident" about growth in 2014.

The firm asked 250 start-up business owners are their outlook for this year.

Top priorities include increasing profits (29 per cent) and growing their customer base (25 per cent). 11 per cent said they were prioritising cutting costs, while nine are focusing on expanding internationally.

The survey also logged the challenges small businesses see for this year (list below).

The number one concern will probably be ameliorated over coming months. Earlier this week, EY published a report which found that lending is set to rise in all areas of the economy, with UK bankers' confidence higher than anywhere else in Europe.

Data from the Bank of England has shown that, although there was a sizeable drop in loans to big businesses towards the end of 2013, small business lending rose.

And in terms of interest rates, the fall in inflation to two per cent has, according to economists, slightly reduced pressure (for the time being) on the Bank to raise rates.

Top 10 challenges for 2014:

1. Access to lending from banks (13 per cent)
2. Increases in tax and interest rates (13 per cent)
3. Increasing costs e.g. energy and travel (11 per cent)
4. Retaining and boosting competitive USPs (11 per cent)
5. Skills shortages (9 per cent)
6. Transitioning from start up to SME (9 per cent)
7. Accessing international markets (7 per cent)
8. Overregulation (7 per cent)
9. Economic volatility (6 per cent)
10. Compliance and regulatory issues (5 per cent)

Paul Callaghan, a partner at Taylor Wessing, said:

Retaining competitive advantage by being smart and nimble about the issues faced today will lead to the growth and survival of UK start-up businesses tomorrow. It’s positive to see that, with the right support, UK business owners are confident about business prospects in 2014.