As we enter a new decade, over half (58%) of small businesses in the UK anticipate a plateau, or for their business to struggle in the year ahead. Only 1 in 4 predict to see growth.
A recent report which surveyed 1,000 small business owners and sole traders across the country (inc. senior decision makers) has been carried out by takepayments Limited, taking a snapshot of the current UK small business landscape. It uncovers key challenges for small businesses in 2020 and tips on how to approach these challenges.
Financial challenges are the biggest concern for businesses in 2020
When asked about their concerns for the year ahead, small businesses listed finance and tech issues at the top of the list, followed by changes in society.
- Financial challenges 36%
- Technology risks 21%
- Societal changes 13%
- Talent and people 12%
- Supply and logistics 5%
It’s no wonder that finances are a major challenge, with 63% of small business owners being “self-taught” about taxes and invoicing. When asked in more detail, pricing and cash flow came up as key worries in this area.
Sandra Rowley, Head of Marketing at takepayments Limited said,
“Pricing structure and cash flow are both key to driving a business forward and yet for small businesses, many have had no or very little training. There are plenty of online courses available but, it’s not just training that can help.
Technology such as Electronic Point of Sale (EPOS) systems can be beneficial in giving key insights real-time to business performance, saving time on accounts and getting a true reflection of what products and services achieve the best margin.
Our study revealed that 49% of small businesses have seen a decrease in consumer spending and so implementing technology to improve your business could be a smart step to help overcome a variety of finance related challenges.”
Is there a small business tech gap?
Technology related challenges are the second biggest challenge for small businesses – 1 in 5 named it their main concern for 2020. Keeping up with technology was a key issue, as was cyber security, compliance and online marketing.
All three of these areas are specialist skills and a small business won’t always have the resource available to be “experts” in each. Social media marketing in particular stands out as a key area where small businesses could see quick wins in 2020…
- 45% want to try more social media marketing but lack the knowledge and the same percentage say they are worried about keeping up with social media marketing
- 52% say social media has helped their business grow and gain new customers, proving the potential of this marketing strategy
Currently, 42% say that a move towards a cashless society would be “bad news” for their business, despite the benefits that can come with this. This is likely because they do not have systems in place to support the trends.
More than five million people lead a close to cashless lifestyle according to a BBC report  and so making sure businesses are prepared for cashless technology will be crucial for the year and beyond.
Ayanda Soares, owner of House of Hair salon in West said,
“My salon has recently implemented technology which has allowed us to be cashless for 2 months now. We decided to do this for the safety of stylists in the salon because we’d had some local street robberies in the Ealing area where we are based.
“It also helps us a business to keep clear Financial records of payments, which really helps my accountant.”
Following the report takepayments Limited have provided tips on how to make it easier for small businesses to thrive.
5 tips for small businesses in 2020
- Face technology head on – technology can be daunting but, it brings with it so many advantages. Whether you look to implement new systems or improve old ones, businesses need to make sure they are adapting alongside the rest of society. You could be alienating some customers by not keeping up.
- Review company sustainability and ethics – 51% of small businesses have noticed clients/customers are caring more about sustainability over the past year. This trend is set to grow further in 2020 and businesses need to make it a consideration in all areas, from supply chain to décor, employee wellbeing and product packaging.
- Get online! – With the local high street struggling, businesses need to look to other platforms to grow such as online channels. 52% say social media has helped their business grow and gain new customers but a lack of knowledge in how to do this is holding people back.
- Take care of your work life balance – Small business owners are known for being hard workers, 1 in 6 do not take 2 rest days (non-workdays) per week and only around half (57%) stick to a 48-hour working week or less. Make 2020 the year you implement a healthier work life balance for yourself and your team. Though your working less, productivity levels are likely to improve.
- Keep up to date on EU news and changes – There will be plenty of change over the year following Britain’s exit from the EU, so make sure to stay up to date with news. Especially if your business is reliant on imports and exports. 42% are worried about potential changes to rules regarding this.
Find out more about Small Business challenges for 2020 by reading the full takepayments Limited report. https://www.takepayments.com/small-business-challenges/