By Rich Preece, VP and Country Manager, Intuit UK
With the UK economy back in full swing, and a raft of supportive measures introduced in the latest Autumn Statement, the scene is set for small businesses to prosper. So what’s in store throughout 2015 and how will small businesses up and down the country be affected?
1) The high street will undergo a revolution
The Dot-com bubble saw the emergence of hundreds of thousands of internet-based SMEs, with the tech start-up scene on both sides of the Atlantic exploding. But in recent years, we’ve seen the revival of the high street, with the number of pop-up shops and restaurants across the country expected to grow by 8.4% over the next 12 months. Movements such as Small Business Saturday are doing a lot to get more shoppers through the doors of local businesses, with some traders reporting takings were up by around a third after this year’s event.
The revival of the high street shows us that you don’t need quirky, new tech-led innovation to be a success. There are countless small businesses on every high street in the UK, whether in a shop front or occupying an office above them. They are built on hard work, determination and the ability to solve a problem, rather than revolutionary ideas.
2) More British SMEs will spread their wings
The Government is keen to get more SMEs selling abroad, as shown by the UKTI’s recent Explore Export Week. Yet SMEs currently account for just 20% of British exports, leaving plenty of opportunity for growth. It will now be interesting to see how many SMEs respond to the exporting incentives to come out of the Autumn Statement, such as the £45 million boost to help them send their goods and services beyond the Eurozone and the US.
Before any small business starts to export to any new market, they should first consider the cultural differences of each region and how they will make a success of their firm overseas. Consider everything from dealing with different customer demands to trading in new currencies.
3) SMEs will have increasing legislation to tackle
While the Government’s auto enrolment regulations were first introduced in 2010, most SMEs’ staging dates will take place from 2015 onwards, depending on their size. Despite the impact that this legislation could have on their bottom line, many local businesses remain unaware of how to make themselves compliant, or even what it is.
With so much confusion surrounding the new legislation, the onus is not only on accountants and technology providers to educate their small business customers, but also SME founders themselves. It’s vital to get compliant well ahead of the staging date in order to avoid punitive fines.
4) Crowdfunding will become the norm
So far, using crowdfunding as a means of financing businesses has been somewhat of a novelty compared to the traditional approaches such as bank loans, venture capitalists and even credit cards. But since the financial crash, SMEs have found it difficult to get access to cash from the banks, and are therefore increasingly turning to alternative sources of funding. As a result, 2015 will be the year that crowdfunding comes into its own.
Regardless of how SMEs get access to their cash, they will need to manage their finances effectively, as poor financial management can be the ruin of any business. In fact, research shows that 44% of SMEs have either run out of cash or come very close within the first three years of trading. Tasks such as getting paid on time, monitoring cash flow, managing unpaid invoices and balancing profit and loss are not trivial and can often make or break the solvency of a business.
5) Flexible working will become mainstream
As the lines between our personal and business lives continue to blur, SMEs are increasingly finding themselves working on the move to keep up with the demands of their business and customers. The advent of cloud technologies is facilitating this trend, making it easier for SME owners to work from any location whenever they have access to the internet.
This cloud revolution is extending to how SMEs manage their finances, with up to half set to adopt cloud-based accounting software by 2016. With access to their finances via the cloud, SMEs can make strategic business decisions like looking at a healthy pipeline and deciding it’s time for R&D investment or identifying a need to ramp up sales before it’s too late.
As shown by this year’s Autumn Statement and campaigns like Small Business Saturday, the groundswell of support for small businesses has never been greater. By embracing different opportunities and staying on top of new regulations, 2015 could be a standout year for small businesses across the UK.