Businesses in the region outperforming projections

Entrepreneurial businesses in the North East have seen positive results in 2011, with over half of businesses reporting revenue in line with, or out-performing their projections for the year.

According to research by Deloitte, optimism among entrepreneurs remains strong with 100% of respondents expecting their business to grow over the next 12 months.

Almost all businesses questioned have forecast double-digit cumulative revenue growth over the next three years.

Despite continued economic uncertainty, many of the regions entrepreneurs are still looking to move into new markets.

23% are looking to expand into Asia, and China and India were both found to be favourites in terms of presenting the best opportunity for growth.

Stephen Hall, Entrepreneurial Business partner at Deloitte in the North East, said: “The rapid increase in GDP in the BRIC countries over the last decade, and the opening of those markets to foreign competitors, has enticed a number of entrepreneurs to focus on some of those countries.

“Asia including China and India, is stirring the imagination of business owners with 23% of entrepreneurs looking to grow their business in the region.

“There is now more trust and reliability in the region which, alongside growing economies and the difficulties facing the UK and western markets, has led to this change in attitude.”

He went on to say that it is vital that all aspects of tax and regulation are considered as exposure to additional unnecessary tax and penalties could easily happen, and missed reliefs may prove costly in the long term.

Interestingly, the research shows that just 37% of businesses say their band has met most or all of their business needs over the last 12 months.

From this, entrepreneurs would like their bank to be more helpful in offering better lending terms, as over half have experienced no change in their bank’s willingness to lend or improve their lending terms.

Mr Hall added: “Ever since the credit crunch and the subsequent financial crisis reduced financial options for businesses, entrepreneurs have been waiting impatiently for lending conditions to improve.

“It is telling that a large proportion of entrepreneurial businesses are still stockpiling cash and nearly a quarter are saying they do not use bank financing for the growth of their business.” 

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