One the great successes that’s bucked the trend of recession and austerity over the past decade has been the small business sector. Apart from a brief dip after the Brexit vote, the FSB’s (Federation of Small Businesses) confidence has been positive for the last five years.
All that seems to be changing, though.
The Small Business Boom
Since the crash of 2008, things haven’t been easy for business, or for their employees. In a way, though, this has led to a boom in small businesses.
This came to a large extent from a combination of employees with substantial redundancy packages and the general unattractiveness of the job market. Even when jobs were available, salaries have steadily fallen in real terms.
In this situation, it’s been much more attractive to start your own business. In spite of the recession, being smart about targeting the market could see those businesses grow and thrive.
There are signs, though, that this could be ending. The FSB has reported a sharp fall in confidence in the last quarter of 2017, with the index into negative figures again. The problem seems to be a combination of operating costs growing, consumer demand falling and weak domestic growth.
This has led to 14% of small businesses reporting intention to sell, cease trading or scale down in 2018. A larger proportion, 31%, expect an already weak performance in 2017’s last quarter to worsen over the current quarter, in a trend FSB national chairman Mike Cherry describes as “troubling”.
Is There Anything You Can Do?
People like us can’t control the levels of economic and political confidence that affect our businesses, but we can control whether we’re in good enough shape to weather the storm. Here are a few steps that could make the difference between whether your business survives or goes under:
- Make sure all your systems are working to peak efficiency. Even if it means taking time out of doing business, or paying to outsource the work, it’ll pay you back in the long run.
- Be sure you’re ready for any changes coming — especially GDPR. The time to address it is well in advance, not the day after it becomes compulsory.
- Keep your accounts up to date. You can’t plan if you don’t know precisely what your cashflow is.
- Chase up all unpaid invoices as soon as they’re overdue, rather than hoping for the best. It’s your money, after all.
If you need to talk about any of this, especially the last point, feel free to give me a call.