SMEs profits increase by 7.3%

Profits at USMEs increased by 7.3% year-on-year in Q4 2024, according to Sage’s small business tracker. This is down from 8.2% in Q3 and 8.6% in Q2. It was also found that productivity fell by 0.9% year-on-year in Q4. While debt levels have fallen by 9.7% over the last year, cash reserves increased by 3.2% reflecting a cautious yet strategic approach to long-term stability. Operating costs were down 0.4%, while revenues rose for the third consecutive quarter, jumping by 2.5%. 

The Tracker reveals that small businesses across the UK are facing an increasingly difficult operating environment as profits and productivity decline.

Despite these challenges, entrepreneurs are taking proactive steps to safeguard their financial stability, revealing a strong ability to adapt and innovate.

These figures reinforce the adaptability of small businesses and their role as a driving force behind the UK economy. However, continued support through both smart policy and business-friendly initiatives will be crucial to sustaining this momentum.

Steve Hare, CEO of Sage, commented: “Small and mid-sized businesses – the backbone of the UK economy – are proving their resilience. While they face a cost-heavy few months ahead, their ability to manage finances and drive revenue growth is inspiring.

“Given the current economic landscape, advocating for policies that support their growth is more important than ever.”