73% of UK SMEs Expect Growth — But Are They Ready for 2026?

A new survey from Aviva has revealed that seventy-three percent of small and medium-sized businesses in the United Kingdom expect growth over the next twelve months. The findings suggest a rising wave of optimism among SME owners after several years of economic uncertainty. However, challenges such as inflation, staffing shortages and supply chain pressures could test that confidence as the country moves toward 2026.

A surge in small business confidence

The Aviva SME Pulse Report found that nearly three quarters of business owners are planning for growth in 2026, while only a small percentage expect their business to contract. Many attribute their confidence to stronger customer demand, wider use of digital tools and improved access to finance.

This renewed confidence marks a turning point after years of volatility driven by Brexit, the pandemic and fluctuating energy prices. For many small business owners, 2025 has been a rebuilding year that allowed them to stabilise operations and prepare for expansion.

Inflation and rising costs still bite

Despite the positive outlook, inflation continues to weigh heavily on small firms. Costs for materials, energy and logistics remain high, squeezing already tight margins. Although inflation has eased from the peaks seen in 2023, many SMEs still find it difficult to balance competitive pricing with profitability.

Financial analysts caution that even small changes in interest rates during 2026 could affect borrowing and investment plans. Careful cash flow management and realistic pricing strategies will be essential for businesses hoping to maintain momentum.

Recruitment and retention pressures grow

Staffing remains one of the most pressing challenges facing UK SMEs. More than forty percent of small firms say they are struggling to recruit skilled workers, particularly in technology, trades and professional services. With wage expectations increasing and competition for talent intensifying, small businesses need new strategies to attract and retain employees.

Flexible working arrangements, opportunities for career progression and a strong company culture are becoming key selling points. Businesses that invest in their people will be better positioned to sustain growth and resilience in 2026.

Supply chains and sustainability

The survey also shows that many SME owners are focused on supply chain stability and sustainability. The disruptions of recent years have prompted firms to diversify suppliers, buy more locally and adopt greener practices.

Sustainability is increasingly viewed as a strategic advantage rather than a marketing trend. Both consumers and corporate clients prefer to work with companies that can demonstrate ethical sourcing and environmental responsibility. For SMEs, integrating sustainability into business planning can open doors to new contracts and long-term growth.

Preparing for growth in 2026

The overall message from Aviva’s research is that optimism is strong but preparation is crucial. Business owners who plan for 2026 should review their cash flow, explore digital transformation and build flexibility into their operations.

Growth opportunities are within reach for many UK SMEs. By combining confidence with careful planning, small business owners can turn potential into performance and play a central role in driving the nation’s economic recovery in the year ahead.