The small business insurance provider Simply Business has published concerning statistics in its SME Insights Report. The report sourced responses from over 1,000 small business owners in the UK and found that 26% of them expect to be out of business by the end of 2023.
In addition to fears about the sustainability of businesses, 52% of those surveyed anticipate their profits will decline by up to 20% in 2023. Evidently, it is a challenging time for small organisations although there is optimism within these businesses that resilience can be developed.
The worries of business owners stem from a variety of sources, but a prevalent concern is rising taxes, interest rates, and inflation eating into profit margins. These factors were listed as concerns by 63% of respondents.
In addition, more than a quarter of business owners are spending 40% more on energy month-to-month. In the most severe cases, leaders have noted a 150% increase in energy expenses.
Late payments continue to be a problem with 35% of SME leaders surveyed reporting that they were owed between £5,000 and £20,000 in late payments.
At the same time, almost a third of bigger businesses surveyed say their customer numbers have reduced. This has led to a number of measures designed to create more resilient businesses being put in place.
How are small businesses responding to the challenges?
Faced with the increased cost of doing business, small business leaders are looking to reduce their outgoings. 21% said they have reduced spend on marketing and subscriptions while 23% are not buying new equipment or tools.
63% say that they will increase prices to help their business’s profitability and 23% are putting hiring freezes in place. Others are innovating, for example by operating solely online to minimise costs or by diversifying their offering.
These steps will undoubtedly help businesses become more resilient, and moving to digital frontiers may even inspire growth. However, these steps are being made on the back of difficulty, and it can often be a task just to realise where efficiencies can be made.
There is help for businesses that are looking to build resilience and grow in challenging circumstances. The Help to Grow: Management Course offers business leaders the opportunity to learn from business experts and receive ten hours of one-to-one mentoring. This has helped businesses change direction, find new avenues for improving turnover, and streamline operations.
Ann-Louise Gilmore, Operations Manager at G&S Transport and Help to Grow: Management alumni, managed to find success during a time of significant challenges for the haulage industry. Reflecting on her experience of Help to Grow: Management she said: “The Help to Grow: Management Course has given me the confidence and insight to streamline our operations and maximise our takings.
"By working closely with my mentor, I was able to identify how to address the challenge of having a negative cash flow and ultimately turn it into one of our major strengths.”
Similarly, Paul Kenny, sales director at Aquatrust, also attended the course and as a result, gained the confidence to differentiate the product offering and launch a new remote service that allowed them to expand nationwide without increasing staffing numbers.
Businesses can become more resilient but it is clear that a helping hand can fast-track this journey.
You can find out more about the course here.
