Across the changing seasons, community businesses have demonstrated sustained optimism. In October-November, 56% think their business prospects will improve in the next three months, compared to only 15% of small businesses in July-September (FSB’s Small Business Index).
What makes community business more optimistic in contrast to other small businesses?
We know small businesses, including community businesses, have struggled this year with high labour costs and funding strategies. But a key contextual difference seems to be demand. Other small businesses have faced weak consumer demand and low revenue, and anticipate sizing down as a result. Meanwhile, community businesses have seen increased demand as more local people turn up in crisis, with worsening mental health or more severe financial difficulties. In response, many community businesses are tackling how to grow.
We are growing despite the harsh economic climate, we are being as efficient as possible to save money and continually looking for new funding sources and pro bono / reciprocal professional support.
While the stress this demand puts on community business should not be dismissed, it provides a stark contrast to other small businesses’ circumstances and above all, demonstrates community businesses’ resourcefulness and dedication to finding solutions that meet local needs. As one community business told us, their local area worsening has made them ‘even more determined to tackle these issues’.
Community businesses are more aware of, and favourable towards, community empowerment policies than the general public
For example, over two thirds (68%) of community businesses are aware of Plan for Neighbourhoods, compared to two fifths (39%) of the public. This awareness may be translating into greater favourability. Community businesses are more likely to say these policies reflect positively on the government than the public – not surprising when reflecting on the impact these policies have on community businesses’ ability to enact change.
We also asked community businesses about the recent Pride in Place announcement. Just over half (52%) were aware of Pride in Place, and a minority (8%) are in a Pride in Place funded area. None of the businesses benefiting from funding felt that any of the policies reflected negatively on the government.
This shows that giving local people more power and resources – like targeted investment – can act as a small building block to regaining confidence in the government. The need to do this more was a key theme of the recent Britain Renewed 2025 conference on public service reform, with Josh Simons MP spurring central government to be bolder, brasher, and show ‘we’re grafting as hard as we can to make change where people live’.
There are continued calls for neighbourhood governance to be community-led
But just announcing policies isn’t enough. Back in September, we asked community businesses about their experiences of neighbourhood governance. A picture emerged of challenges within traditional governance structures, including a lack of shared power between communities and local councils.
These challenges underpin community business’ cautiousness towards Pride in Place’s Neighbourhood Boards. When given information on the Boards, almost half (45%) were sceptical the government would give more power to local communities. A third (29%) cautiously welcomed the principle of more community power via a Board, but considered this view to be dependent on local authority implementation, who gets to be involved in the Board, and who in the community would be consulted.
This sounds good but will local government actually put this into practice. In our town, the local developer who co-owns the town centre with the council, has most of the say in what happens locally.
Think this is a good idea in theory … but I’m wary that the people in most need are unlikely to be the ones who are consulted. For example here ... we have an older population who are not good with technology so any online engagement will never reach them.
We asked these questions before the Pride in Place prospectus was published, but these responses reiterate the importance of the community-led features of Neighbourhood Boards outlined in the prospectus. These include the requirement for Boards to have more residents than elected representatives, an independent Chair who must be ‘from’ the local area, and for all places to transition to a community-led model of delivery by year three of the programme. Such requirements are welcomed and go further to show to communities that actions, not just words, are being taken.
Our third Pulse survey was carried out between 30th October – 26th November 2025 and had 50 respondents. The online survey was sent to our mailing list of community businesses who had either applied for our grants or previously worked with us. The results of this survey are not representative of the views of the entire community business sector.
