SMEs are the unsung heroes of any economy- producing numerous jobs, the backbone to big corporates to scale up and still struggling to sustain themselves. They are unable to innovate as fast as younger companies and lack the funds that larger corporations have.
As we enter a new decade, over half (58%) of small businesses in the UK anticipate a plateau, or for their business to struggle in the year ahead. Only one in four predict to see growth.
A recent report by takepayments limited surveyed 1,000 small business owners and sole traders across the country including decision-makers taking a snapshot of the current UK small business landscape. Here is a look at the key challenges for small businesses in 2020 and tips on how to approach these challenges.
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Financial challenges are the biggest concern for businesses in 2020
Small businesses listed finance and tech issues at the top of the list, followed by changes in society. Finances are a major challenge, with 63% of small business owners being “self-taught” about taxes and invoicing. When asked in more detail, pricing and cash flow came up as key worries in this area.
- Financial challenges 36%
- Technology risks 21%
- Societal changes 13%
- Talent and people 12%
- Supply and logistics 5%
“Pricing structure and cash flow are both key to driving a business forward and yet for small businesses, many have had no or very little training. There are plenty of online courses available but, it’s not just training that can help.
Technology such as Electronic Point of Sale (EPOS) systems can be beneficial in giving key insights real-time to business performance, saving time on accounts and getting a true reflection of what products and services achieve the best margin.”Sandra Rowley, Head of Marketing at takepayments Limited
The study revealed that 49% of small businesses have seen a decrease in consumer spending and so implementing technology to improve your business could be a smart step to help overcome a variety of finance related challenges.
Is there a small business tech gap?
Technology-related challenges are the second biggest challenge for small businesses – 1 in 5 named it their main concern for 2020. Keeping up with technology was a key issue, as was cybersecurity, compliance and online marketing.
All three of these areas are specialist skills and a small business won’t always have the resource available to be “experts” in each. Social media marketing, in particular, stands out as a key area where small businesses could see quick wins in 2020…
- 45% want to try more social media marketing but lack the knowledge and the same percentage say they are worried about keeping up with social media marketing
- 52% say social media has helped their business grow and gain new customers, proving the potential of this marketing strategy
Focus on sustainability is here to stay
51% of small businesses have noticed that their clients/customers are caring more about sustainability over the past year. This trend is set to grow further in 2020 and businesses need to make it a consideration in all areas, from supply chain to décor, employee wellbeing, and product packaging.
How to cope in a cashless society?
Currently, 42% say that a move towards a cashless society would be “bad news” for their business, despite the benefits that can come with this. This is likely because they do not have systems in place to support the trends.
More than five million people lead a close to cashless lifestyle according to a BBC report and so making sure businesses are prepared for cashless technology will be crucial for the year and beyond.
There will be plenty of change over the year following Britain’s exit from the EU, so make sure to stay up to date with news. Especially if your business is reliant on imports and exports. 42% are worried about potential changes to rules regarding this.