SMEs, along with the rest of the UK, have experienced a rollercoaster of a year. We’ve seen curveballs thrown left, right and centre, all posing potential challenges to overcome. The UK has been hit with a number of obstacles: from Brexit, the dropping pound, an abundance of fake news, and numerous other economic issues. Things might all seem quite doom and gloom, but here at Curated we wanted to investigate what these developments actually mean for SMEs. In light of this, here’s our view of the current climate and how digital can help you buffer some of the effects.
Getting to the nitty gritty
Brexit means what exactly?
You’re probably sick of the ‘B’ word by now, but there’s a long road ahead before it’s over. In two years, we will officially leave the EU — what exactly that process involves is still unclear. But is it actually a threat for SMEs?
Theresa May revealed her Brexit Plan for Britain in February, dropping the bombshell that we wouldn’t stay within the European Single Market. Of course, if you’re an SME that trades within it this poses a problem, especially as Britain’s relationship with European trading partners is under speculation.
Despite this being a blow to SME’s in general, those that have a strong contingency plan will be able to ride the Brexit wave. So what to include? Two of the most important elements to consider are trading and exchange rate volatility. The pound dropped to its lowest level in thirty years the day we found out the fatal news, however it remained stable during the triggering of Article 50. With this in mind, it’s just a case of preparing for the worst — even though it might not be as bad as we all think. What we do know is that there are uncertain times ahead and naturally exchange rates will fluctuate. Minimising any risks related to currency and having a keen eye for any changes will be the best way for businesses to keep their heads above water.
Founder of Enterprise Nation, Emma Jones gave some more great advice for SME’s planning for Brexit: “Businesses should check financials first. Second, make the most of things staying the same. Third, prepare to look further afield.” So, whether you’re part of those expecting a negative impact or not it’s important to keep your eye on the ball.
Expanding the workforce
This goes hand in hand with Brexit. With uncertainties around the UK’s future immigration control, it’s logical to want to refrain from expanding your company. According to Zurich SME, workforce expansion plans fell after Brexit, citing it as one of the biggest reasons why decision makers were not planning on expanding. Shockingly only 14% of employers are choosing to hire at this current time.
Paul Tombs, Head of SME Proposition at Zurich, put this in plain terms: “Businesses with smaller workforces are extremely susceptible to staffing and skills shortages…there is a crisis looming in the UK, as employers gear up for a scramble to get and keep any skilled workers they can lay their hands on.”
Until the future of immigration control is solidified you might feel like you’re in a state of limbo. There is no wrong or right answer here, but if your business is doing well you shouldn’t completely write off expanding. Just think about your options thoroughly and be selective in your recruitment process.
It may be hard to imagine life without the internet, but for business owners, it’s nigh on impossible. Internet outages mean a duration of time where the internet is unavailable and a company goes offline. There’s rising concern about outages in the UK; in 2016 British businesses lost a whopping £7 billion to internet outages according to Beaming. You might rely on the internet for data collection, trading, offering services, and of course marketing so the prospect of outages becoming a common reality is understandably stressful.
Indeed, it’s quite possible that you’ve experienced this nightmare already. Beaming discovered that 77% of businesses experienced connectivity failure in 2016. With average losses of around £1,287 for every 27 hours of lost connectivity, it is no wonder that this is a constant concern, especially with the consistent movement toward digital we’re seeing. It would be an idea to put together an action plan in case this happens to you. The key to this is being flexible: both digitally and in terms of your business. Get clued up on where your nearest free wifi spot is, and keep a constant eye on your website to check for any slip ups. It’s all common sense but it’s these little actions that could make all the difference.
Another area to keep track of is your online security. Smallbusiness.co.uk’s survey uncovered that one in five e-commerce websites do not know who is responsible for their website security. Also, 50% claimed that they are not prepared for a cyber attack and did not have a recovery plan if one took place. Don’t let this be you.
It’s easy to overlook, but there’s no doubt that this one is a biggie. Not only is it your responsibility to keep customers data safe, a cyber attack can also destroy years of work and lead to a significant loss of profit and reputation. It could even put an end to your business. Invest in quality internet security and always investigate any breaches immediately.
How can digital help?
The internet may have its downfalls but luckily, they don’t trump the positives. The opportunities for you to embrace digital are endless. Digital levels the playing field by allowing you to compete with larger businesses, which was pretty much impossible previously. A global survey found that the main reasons SME’s gave for investing into technology were, “revenue growth, customer acquisition, and driving operational efficiencies.” Basically increasing the amount you’re able to make in profits, the number of people you can talk to, and making your business work better for your customers.
Having to manage an increasing amount of collectable data and analysing it becomes tricky with growth. The Telegraph highlighted that this is one of the key uses of technology, that will not only benefit but transform the way SMEs work. Digitising your databases (if you haven’t already) is something which can streamline your business model and make your life a hell of a lot easier.
Getting digi with payments
Financial technology (A.K.A Fintech) can automate your payments and study data, simplifying everyday tasks that take up a lot of your time and effort. In short, this new payment process improves your cash flow and boosts accuracy by eliminating any potential human error. Plus you won’t have as much cash lying around your premises. ‘Fintech’ is already empowering SMEs to take more control over their finances, so it’s definitely worth looking into for your business.
There has been a massive move away from using cash in the UK with a reported 74% of people currently using digital mobile purchases. This technological advancement allows you to take advantage of this — expanding your customer audience in an ever-growing cashless world
What’s more, it’s a great resource to find investors who sit outside traditional methods such as banks, government schemes, and private investors. However, you must be careful when selecting a fintech supplier for your business as not all payment processing systems are reliable. Do your research, browse the market, and ask other SMEs in your industry which system they have opted for.
So there you have it: the bad, the good, and the potential solution to some of the key concerns for SMEs right now. So, what’s the main take away from all of this? Well, we’d say it’s the value of good planning.
Anything could happen and the digital age doesn’t wait for anyone. Although it’s a terrible cliche, “fail to prepare and prepare to fail”, really does ring true here. If you are an SME who is keen to know more about going digital, don’t hesitate to get in touch with us — we’d be happy to help.