Brexit and the appointment of President Trump has sparked the urge for businesses to cut back. Rising costs, uncertainty and financial concerns have meant 58% of UK small businesses plan to prioritise cost reduction over expansion and developing skills in 2017.
Respondents to the survey by Liberis also mentioned Brexit, rising costs and Donald Trump as challenges that their businesses expect to face in 2017, which may explain why business owners and managers plan to reduce costs next year. One respondent said that they need ‘better prices to survive’.
Which type of businesses plan to reduce costs?
The sector that prioritised ‘reducing costs’ above everything else was the retail sector, making up 21% of the 58% that selected this as their main concern for 2017. In contrast, a majority of those in the automotive sector stated that to ‘develop staff skills’, was their main priority for 2017.
When broken down by size of business, the smaller SMEs (1-49 employees) are looking to reduce costs next year, whereas those with 50+ employees are keen to ‘develop staff skills’ as their priority in 2017.
When asked what challenges they expect to face in 2017 many listed Brexit, with some even considering the new American President-elect, Donald Trump, as a potential challenge.
These challenges, along with a focus on cost reduction, suggest that after facing a problematic 2016, businesses are being cautious when entering 2017. Of those that listed Brexit as their main challenge for 2017, 61% were aged over 45 years old and 84% of were male respondents.
The most popular challenge mentioned in the survey however, was competition. 86% of those that listed this as their greatest challenge of 2017 were businesses made up of 1-10 employees across several different sectors, including property, hospitality, finance and technology.
Top New Year’s resolution
The survey revealed that 28% of SME owners’ top work-related New Year’s Resolutions was to ‘gain a better work life balance’.
Of those that listed this as their New Year’s Resolution, 24% of them were Millennials in the 25-34 year old age bracket with 25% of them being in the hospitality industry.