As we approach the end of the first quarter of 2016, it is time to assess the year’s business forecast – and most importantly, what this information means for those involved in a small to medium sized business (SME). As the first two months of the year have passed, hopefully you have settled last year’s accounts and are moving on to make 2016 a new – and successful – year in its own right.
There are some positives – and negatives – for SMEs in the following expert predictions, read on in order to learn more about the year ahead and what you can do in order to maximise your potential.
2016 – A positive outlook for the year ahead?
The year started off with a bang when experts across the UK began predicting some positives for those involved in entrepreneurship and business. In late December 2015, the Telegraph published predictions that the nation seemed to be on the “cusp of a period of sustained good health.” This certainly seemed to be great news for SMEs.
It has since been predicted by the Bank of England that the British GDP will grow at an annual rate of 2.5 percent over the next half decade, a healthy boost that is pleasing business owners large and small. After all, if there is more money in the economy, it stands to reason that average people have more money in their pocket – there are then certain to be more people willing to part with their hard earned pounds on products, services and experiences – and maybe even on your SME.
While this news seems like unequivocal good tidings for any SME in the UK, many small business owners are remaining cautiously optimistic. In a survey of thousands of entrepreneurs conducted by YouGov and EasyJet, only slightly more than half of the SME owners reported feeling like their businesses will grow over the next year.
This means that over forty five percent of those questioned are feeling rather apathetic about the prospects of the coming 12 months. Perhaps this is less a feeling of apathy, and simply just caution as the economy slowly recovers; it would be interesting to poll those same business owners this time next year and see if they have embraced the economy’s potential.
How can SMEs embrace and harness the surging economy’s potential?
If the UK continues to grow, many SME owners are wondering how they can embrace this potential and truly harness it for their own growth and profit. Here are a few pieces of advice that any small business owner can implement.
Hire the right people for the job
While it may be tempting to hire prodigiously during this time of growth and positive economic forecasting, it always pays to slow down and truly think about the best person for the job when it comes to hiring new staff.
While you may be in desperate need of a warm body to help you field calls, complete daily tasks and help around the office, it is incredibly important that you put a considerable amount of effort into finding the right staff. You may need to offer increased benefits, more perks and higher salaries in order to attract the best talent on the market.
Prepare for your exports to increase
Whether your SME regularly ships millions of pounds worth of goods around the globe, or whether you have never sold a single item beyond the border of your county, you need to begin to craft an international sales strategy. With foreign markets more lucrative than ever, and platforms such as Amazon, EBay and Etsy enabling you to reach them quickly and easily, you would be remiss to lose out on exports.
Even if you are not immediately planning to commence sales abroad, you should begin preparing for the logistics in order to do so as soon as possible. Having a strong implementation strategy in place will help you to enact smart policies as soon as the time is right, saving you time, money and lost sales.
While you do not want to squander opportunities owing to an overly vigilant attitude toward the economy, you still must be realistic; a slip in the national and/ or global economic outlook may cause the UK to fall right back into a recession. While you should plan for and take advantage of growth, you must also always have a back-up plan and a more conservative strategy to fall back on in the event of financial turmoil.
2016 – The Next Three Quarters
Of course, for every positive financial forecast there is at least one more foreseeing doom – some economic experts have predicted that we can expect a financial crisis paralleled only by the great recession. While this opinion certainly has its champions, a financial crash is far from a foregone conclusion; many other experts are predicting a far better outcome.
One thing that analysts can agree upon is the supposed glut of SMEs on the market; start-ups, once so exciting and new, are increasingly being seen as a dime a dozen, and some experts think that that could spell disaster. lan Patricof, co-founder of Greycroft Partners, is worried. He has stated, “I am concerned about the over exuberance in financing of startups. There are just too many at the moment… I think inevitably we’re going to see more of these try the public market, and that will finally tell us whether they can support themselves.” While he does have a point about the large number of start-ups on the market, Patricof may be underestimating the power and the innovative spirit of your SME.
As a savvy entrepreneur, you already know that you need to ensure that your business stands out from the rest – let the financial climate of 2016 help you to prioritise, strategise and grow wisely.