Just one in five Scottish small businesses looking to hire amid global turmoil

Around two in three (65 per cent) of Scotland’s small companies are still working on plans to strengthen and grow over the spring months, according to new research from alternative lender Novuna Business Finance. However, that percentage is down from 70 per cent at this time last year.

Meanwhile, just 18 per cent of smaller firms have plans to hire new staff - a fall from 24 per cent.

While 84 per cent of small businesses started 2026 with hopes to grow their enterprises during the course of the year, the first quarter has proved to be challenging for many, Novuna noted.

The outbreak of the conflict in the Middle East has already impacted energy prices, triggering concerns over rising inflation and a hit on consumer spending in the coming months.

Set against this challenging market context, the majority of Scottish small businesses remain committed to working on short-term growth plans, according to the latest research, but the key priority areas all now focus on measures to protect cashflow and minimise costs.

Across Scotland, the survey found that 62 per cent of small businesses are prioritising the need to keep fixed costs down. Meanwhile, 44 per cent also attach importance to protecting cashflow - and more than one in four (28 per cent) firms said they are prioritising the need to chase late payments.

Beyond these defensive measures to protect cashflow and control costs in a challenging economic and geo-political climate, some Scottish small businesses are said to be looking at “creative and proactive” ways to achieve business growth.

Some 23 per cent of enterprises plan to expand into new markets overseas, despite the legacy of Brexit still being seen as a growth barrier to 19 per cent of respondents. In addition, 15 per cent of small business owners are using the context of market uncertainty to free up working capital by re-assessing their funding arrangements.

About 24 per cent of respondents are looking to invest in new equipment - offering the potential to reduce overall energy usage and bills.

Joanna Morris, head of insight at Novuna Business Finance, which is a trading name of Mitsubishi HC Capital UK, said: “Given the severity of market uncertainty, the fact that many Scottish small businesses are working on growth initiatives is a huge positive - although much of this relates to practical measures to protect costs and cashflow. Job creation is a casualty of this defensive, cost-control posture and is not good news.”

Last month, a key survey warned that business confidence in Scotland remained fragile, with economic and political uncertainty said to be “weighing heavily” on investment decisions.

Cost pressures remained the dominant concern for firms north of the Border, according to the Fraser of Allander Institute’s latest Scottish Business Monitor.

All six headline indicators in the quarterly survey - which tracks business sentiment from more than 250 firms across all 32 Scottish local authorities - remained in negative territory for a fifth consecutive quarter.