The Business Owners Sentiment Survey

Britain is turning a corner, according to its new Chancellor, but British businesses are already pressing ahead. Despite an uncertain economy and looming Budget, the country’s business owners are pursuing plans for growth, expansion at home and abroad, and harnessing AI to transform their operations.

The Business Owners Sentiment Survey (The BOSS)* finds the country’s entrepreneurs surprisingly bullish. After suffering significant tax rises over the last couple of years, with the hike in national insurance and reductions in business property relief, a new government has brought some hope: Almost one in five (19%) strongly agree that, compared with a year ago, the UK is becoming a more attractive place to start, grow and own a business. Just under two-fifths (38%) agree somewhat.

More importantly, the business owners surveyed have high hopes for AI: 

The risks they see on the downside, meanwhile, are minimal: Just 12% rank losing business to tech-enabled competitors as among the biggest challenges currently facing their firm.

That is not to say that business owners are blasé about the challenges they face – from business rate rises (which 28% consider among the biggest current challenges) to global political uncertainty (26%) and the increased cost of raw materials and goods (24%). Rises in taxes and wages also continue to bite: A third (33%) of business owners expect hiring freezes in their business in the next 12 months, and more than one in five (22%) say the same for redundancies.

They also see potential trouble in the Chancellor’s upcoming Budget in October, with employers’ NI and (perhaps more worrying for the government) capital gains tax their top concerns when asked what potential changes in the Autumn Budget worry them most.

Only 8% say there are no potential changes of concern. Six in ten, meanwhile, agree strongly (23%) or somewhat (37%) that they would be deterred from starting a new business if higher capital gains tax (CGT) rates were introduced at the Budget.

The challenges don’t just come from outside, but also from within. The commitment to AI brings risks. Although the survey finds over three-quarters (77%) are confident that they know how AI is being used in business, only 31% strongly agree, with 46% agreeing only somewhat. Similarly, only 30% strongly agree that they are confident they have appropriate controls in place to manage any risks the use of AI may create for their business, although 45% agree somewhat.

Perhaps more significantly, 59% agree strongly or somewhat that AI has enabled their business to reduce headcounts or hiring. While the technology will undoubtedly deliver efficiencies and other benefits, there’s good evidence that pricing for foundation models such as Claude, ChatGPT, Copilot and Gemini is artificially low. Businesses risk shedding jobs and restructuring operations on the basis of a subsidy that won’t last.

As Britain turns a corner, business owners need to be cautious as well as ambitious when considering committing to a new course.