Revenues down for UK small to medium sized businesses

The latest Sage Small Business Tracker, produced in collaboration with Edinburgh’s Smart Data Foundry and the Centre for Economics and Business Research (Cebr), revealed that this drop in revenues ended a run of four consecutive quarters of growth.

Dougie Robb of Smart Data Foundry | Supplied

The quarterly report, which draws on anonymised accounting and payroll data from more than 140,000 firms across the UK, provides near real-time insight into small to mid-sized business (SMB) performance.

The report also found that profit growth for UK SMBs reached 3.7 per cent year-on-year, down from the first quarter of 2025, but still up compared with the past two years. Profit growth in Scotland exceeded the UK average at 4.9 per cent. Across the UK, business expenditure fell by 2.9 per cent - the first decline since early 2024 - helping to support profit growth even as revenues decreased.

Report authors said that by turning everyday transactions into meaningful economic insights, the tracker shows the potential power of smart data to provide a clear snapshot of the economy. They added that it helps policymakers and business leaders track the impact of wider forces, such as policy changes or market shocks, on business performance over time.

Dougie Robb, chief executive officer at Smart Data Foundry, said: “Unlike survey-based approaches, the Sage Small Business Tracker reflects actual financial data, offering a current check on the health of this key part of the UK economy. It allows researchers and policymakers to monitor the short and long-term relative regional performance of small businesses together with highlighting the impact of national and regional policy initiatives, such as the revised National Insurance contributions.

“Details such as trends in cash balances, debt levels and average invoice payment times help to highlight cash flow challenges – a potentially valuable insight as the government develops new legislation to penalise suppliers who consistently pay late.”

He added that this quarter the tracker highlighted some key regional variations and such insights can help central and local government target support more effectively.

The insights show how smart data can shed light on the challenges and resilience of the UK’s small business community, while informing evidence-driven policies to protect and support them, according to Robb.