More than 80% of UK small businesses are planning growth-focused initiatives for 2025, reflecting increased optimism as enterprises report a two-year high in growth projections, according to a Novuna Business Finance study.

Key areas of focus include boosting new business sales (43%) and reducing fixed costs (24%). Diversifying business models and developing new products or services are also top priorities for one in five firms. However, recent National Insurance changes appear to have tempered hiring ambitions, with only 7% of SMEs prioritising senior hires and 9% planning to recruit young talent.

Regionally, London leads the charge, with 94% of businesses prioritising growth, followed by the West Midlands and North East at 83% each. Sectors such as media (92%) and manufacturing (90%) are the most likely to focus on growth initiatives, highlighting strong momentum in these industries.

The findings come as 35% of small businesses nationally reported growth in the past three months, the highest figure in two years. Despite concerns surrounding the Autumn Budget, many SMEs are ending 2024 on a strong note.

Joanna Morris, Head of Insight at Novuna Business Finance, said: “The percentage of enterprises predicting growth has been at a two-year peak since July. A significant proportion are already prioritising growth projects for the year ahead. We are committed to helping businesses realise their potential and build on the resurgent confidence seen this year.”

Financial prudence remains a key theme, with businesses aiming to tackle fixed costs and build financial reserves as part of their strategy to ensure resilience in a dynamic economic environment.

The study highlights the determination of UK small businesses to drive forward, positioning themselves for sustained success in 2025 and beyond.

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