Small firms turn a buck but trend still difficult for many

Published on Tuesday 1 December 2009 20:39

ONE in three small Scots firms increased profits and sales against all the odds this year, a survey today reveals.

Research from the Federation of Small Businesses (FSB) shows Scotland's army of SMEs refused to give up during the recession, tenaciously creating new products and services to beat the downturn.

The companies, which account for 99 per cent of all businesses north of the Border, also weathered the crisis better than their southern neighbours, the survey shows. Just one in four small firms succeeded in raising profitability in the rest of the UK.

Colin Borland, public affairs manager for the FSB in Scotland, called the results a "tribute" to the tenacity of small firms. He said: "It underlines just how determined some small businesses are to survive."

However, Borland also warned that many firms have experienced a rough ride this year, with 47 per cent of Scottish SMEs complaining of falling profitability.

"We mustn't get too carried away," he added. "It's a mixed bag and it's still tough out there for many."

The study, which was carried out in association with ICM, showed a third of the 10,000 SMEs polled across the UK suffered an increase in lending charges this year. The majority said the cost of borrowing rose by 1 per cent.

The FSB is calling for further economic stimulus to help small firms create more jobs and access fairly-priced finance.