According to business statistics prepared by the House of Commons Library, small businesses comprised over 99% of all businesses in the UK last year, with 96% being made up of fewer than 10 employees. Since the turn of the century, the number of small businesses in the UK has increased steadily; however, 2018 saw a decrease of 0.5% when compared with 2017. This can be explained by the incredibly competitive nature of the small business market. So in this article, we look at the challenges and opportunities faced by small business owners in 2019.
Staying up to date with the current political landscape
For all UK small businesses, the imminent impact of Brexit is both confusing and concerning. While it will no doubt have an impact on your business operations in some capacity, just how much of an impact it will have is still largely unknown. Until Brexit has taken place, the total extent of Brexit’s influence on businesses in the UK is merely speculative. There are, however, still some considerations that you can account for when it comes to the UK’s impending departure from the EU, and using these to make an educated guess as to how they will impact your business may prepare you better for what’s to come.
The pros and cons of a weaker pound
A weaker pound is set to attract non-EU investment into UK businesses with foreign companies looking to get a foothold in the UK market, but export-oriented firms or business operating in high-tech and service-related industries may see a decrease in capital investment according to a study by the University of St Andrews. This is mainly due to uncertainty surrounding the ramifications of the UK’s departure from the EU.
Supply chain disruption
If you operate in food retail, logistics or fashion, the primary concern for your business will be the disruption to your supply chain, as well as fluctuations in the exchange rate, which may see an increase in the cost of supplies and a decrease in the value of existing assets. Those providing services such as construction will also be affected, with economic uncertainty resulting in reduced buyer confidence – which in turn will impact the demand and therefore the pricing of building and construction services.
Making Tax Digital
As of 1 April 2019, the Government’s Making Tax Digital for Business will come into effect. Essentially, this legislation makes it mandatory for all businesses paying VAT over the threshold of £85,000 to migrate their finances and accounts to an online, cloud accounting platform. Making tax digital is set to become ubiquitous for all businesses, and is being implemented as a means of providing more accurate, efficient and effective taxation – with less likelihood of errors, which can cost a business money.
Not only is cloud accounting a simpler way to organise and reconcile your finances, but it is also a valuable tool for protecting your business’s financial data. Many of the intuitive and intelligent cloud accounting software platforms available encrypt your information when stored and transferred, which also means your business is safeguarded against potential fraud – the most commonly occurring crime experienced by Britons in 2018.
For businesses looking to grow, using a cloud-based system like Xero provides a fantastic opportunity to gain a better understanding of your enterprise’s costs and revenue breakdown, with reports required quarterly rather than annually. With a better grasp of your company’s finances, you’re better equipped to analyse areas for improvement and streamlining – which could prove crucial when looking to expand. At Berley, our team of Xero-certified advisors can help you get the most out of the accounting software.
Protect yourself against fraud
Last year fraud was responsible for more than 30% of crime in England and Wales, with an estimated 3.5 million occurrences. Many small businesses have been victims of fraud; this is why businesses looking to grow need to take the necessary measures to protect themselves from any unwanted risk. For more information, check out this article ‘Protect yourself against fraud’ we published last week.
Get online because eCommerce will continue to grow
Staying in tune with market trends is a key consideration for businesses wanting to promote growth both internally and externally. For small businesses, one of the most important aspects of the current climate is the insurmountable rise and popularity of eCommerce. According to statistics from eMarketer, the number of digital buyers is set to steadily increase in 2019 (7.2% on 2018) and into the future, with similar figures likely in 2020 (6.6% on 2019). In essence, if you want your retail business to grow, you need an online platform. In the digital age, an online presence is essential business practice, and small businesses without this are at risk of falling by the wayside.
For those not yet online, drawing up a cohesive and comprehensive online marketing strategy is of the utmost importance and will facilitate greater awareness of and interaction with your brand. For retail industries alone, eCommerce sales figures are predicted to increase by 13% in 2019 as opposed to the previous year, and without the proper measures in place, you could be losing out on a significant portion of the market share.
Business growth strategy
As a business owner, being conscious of your business’s limitations is a key factor in determining its success and potential for growth. While having a positive attitude is essential – and gives you the push you need to pursue growth and expansion – you also need to be mindful of setting realistic, achievable targets. Without these, you put your business and its future prospects at risk. In order to circumvent this dilemma, having a solid business growth strategy is of paramount importance. A robust growth plan should highlight the business objectives for the year and list the ways your business will achieve them, as well as identifying any potential risks and measuring your progress.
At Berley, our small business growth specialists have been sharing practical strategies with small businesses across London and getting them on the path to success. We can help with:
- Identifying a growth strategy that’s right for your business
- Discovering opportunities for organic growth
- Identifying potential problems and prepare strategies to tackle them
- Identifying a tax structure that works for you
- Setting realistic goals and targets for growth
- Evaluating your progress as you grow
- Providing advice on acquisitions and mergers
Berley, small business growth specialists
As specialist chartered accountants focused on supporting small businesses, we understand that when it comes to growth, there is a lot to consider. We have over 30 years of experience and the insights you’re looking for to help you establish a solid foundation and strategy for growth in 2019 and beyond.
Call us on 020 7788 8261 to talk with someone from the Berley team to discuss how we can assist you in growing your business.
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