It’s been a tough time for small businesses over the past couple of years. In fact, it’s been a tough time for most people. However, no business, big or small, was able to escape the impact of the Covid-19 pandemic.
Now, regulators have warned that the energy price cap will rise further in October to around £2,8000, due to continued volatility in the gas market. With that in mind, it’s difficult to not reflect on what small businesses have had to deal with since 2020.
With two years of uncertainty, restrictions and lockdowns to comprehend, it has likely taken its toll. Covid-19 cost SMEs an estimated £126.6 billion. Double what owners predicted it would cost them at the beginning of the pandemic. With six million SMEs in the UK – accounting for over 99% of all businesses, 33% of employment and 21% of all turnover – this £126.6 billion hole in the books was a huge blow to the economy.
Behind every small business is an owner with families, livelihoods and dreams. The impact of the pandemic was devastating for a lot of businesses, both financially and emotionally.
More than four in every five small business owners say the pandemic has negatively impacted their mental health. Finances have been at the root of many worries as 61% of small business owners have had serious financial concerns at some stage of the pandemic.
81% of self-employed people felt that the government did not support small businesses enough, as over 2 million SMEs were unable to access about financial support.
Yet in all of this, we have seen countless examples of the resilience, resourcefulness, and creativity that we have come to associate with the UK’s small business owners. And at Account-Ease, we’re lucky enough to work with so many of them on a day-to-day basis, supporting the financial side of their businesses.
Respectfully, many small businesses have grown over the last 2 years. Stemming from passions that they may not have had the time to explore if it wasn’t for lockdowns and furlough.
With energy prices and the cost-of-living soaring, it’s set to be a difficult time once again. But what makes an SME able to thrive and survive during tough economic times?
What are your goals for the next 12 months?
All businesses will set goals as part of their business strategy, to ensure growth year on year. KPIs provide targets for teams to aim for, milestones to gauge progress, and insights that help people across the organisation make better decisions.
Some of these may include:
Make the business more profitable
– Bringing in more money than the previous year is always a key aim in business, but with the rise in energy and therefore more outgoings, you may be looking for new areas to cut costs.
Build an online presence
– If the pandemic taught business anything, it’s that having an online presence is vital if for some unbeknown reason, such as a pandemic, was to force the world to stay indoors. For a lot of people, social media was the only way to interact with customers. Making sure your website is up to date and has ecommerce ability and having social media profiles can turn business on its head.
Generate returning customers
– Customer acquisition and retention marketing is key to successful business development. Acquiring a new customer can cost five times more than retaining an existing customer and increasing customer retention by 5% can increase profits from 25-95%. The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.
Release new products
– Keeping your business new and exciting is paramount to success. Keeping up with the times and ensuring your offering is timely, innovative, and ahead of the times is key.
Give back to the local community
– With so many people struggling in your area, it may be a goal to give back to those that have supported you in the past. This could be by donating to the local foodbank, organising fundraisers, or simply giving a top rate of service at a price that is fair. One aim for many businesses this year is to give back as much as they can.
Tips for Success this Year
Behind every successful business is someone who is creative, organised, financially savvy and understands the risks and rewards when it comes to being self-employed.
Here are a few tips for success in what could be another difficult business year:
Organisation is key
Organisation is essential for a successful small business. Being flexible and able to quickly adapt to changes puts you ahead of the crowd.
It’s also incredibly important to be able to communicate these changes to loyal customers quickly and efficiently. The quickest way to do this is via social media. But it’s also important to have your website, Google business page and listings up to date with your opening hours and contact information. Gaining customer’s trust and keeping them informed of any changes were pivotal in trading during the pandemic, and is something that you need to continue now.
More than four in 10 small businesses have managed to grow over a turbulent two years by pivoting their business and embracing new ways of generating revenue.
However, 46% believe they are still a few years away from accomplishing their business goals. It’s important to be patient and break your goals down into smaller achievable actions.
Reduce Energy Consumption
With energy prices rising again. It’s a good idea to review your energy consumption and reduce it in any way possible. To do so, you could replace standard light fixtures with LEDs to reduce energy consumption. Switch to a renewable energy provider and request a smart meter from your business’ energy supplier to ensure your bills are accurate.
Businesses who have taken measures to become smart with their energy usage are able to lower their overheads amid rising costs. In a recent study of 500 SME overs, 23% already had, or have requested, a smart meter installation in the last six months to help them to better control their business’ energy costs.
If you have company cars or delivery vans. It could also be a good time to look at switching to electric vehicles to save on fuel costs.
Businesses with an environmental mission in general attract new customers. Promoting your environmentally friendly methods can set your business apart from your competitors and attract new customers who want to buy products and services from an environmentally friendly business. Focusing more on your environmental impacts can also help to attract and retain staff.
Nearly three in 10 small business owners are taking much more notice of their energy consumption throughout the day, while a quarter have looked into using cheaper, greener energy sources and smart devices.
Look at how your staff are working
A fifth of small business owners regularly work a 12-hour day. With a quarter admitting getting no holidays was the hardest thing about their first year of trading.
If you or your team are working longer than average hours and not taking any time out. It could be time to review your processes.
In terms of saving money, 43% of those polled have cut down on their overheads by encouraging staff to work from home more.
Another 45% used any potential downtime to try and amp up their social media presence, to help build their business. Before turning to professionals. It’s a good idea to have someone set up social media profiles and start working on them within the business – particularly if you have someone social savvy on board. They can post day-to-day images and keep these up to date in-house – but make sure they are given the time to do so.
Make sure you have the right accountants for your business
Working with an accountant who specialises in small business accounts is vital to the success of your SME.
At Account-Ease, we provide a comprehensive accounting service for small businesses. Being once a start-up company ourselves. We understand how daunting it is to start a business from the ground up. Which is why we’re uniquely placed to provide the right level of support to any small business.
Whether you’re a fresh start-up or an established company. Our accounting services have been created to take away some of the pressure. Allowing you the space to focus on your business whilst we focus on your numbers.
What makes us special? We’re a tech-savvy business that has experience working with a diverse variety of industries. From tech start-ups and cyber to online retail and eCommerce. We’re able to support a wide range of small to medium businesses – regardless of size or turnover.
You will have your dedicated accountant from our expert team. Who will spend time getting to know your business and its specific requirements, meaning we offer a personal service that is tailored to what you need.
We also operate under a Client Service Guarantee. This means that all requests made to your accountant before 3pm will be responded to that very same day – no more trying to get hold of your accountant!
If you’re looking to switch, now is a great time! You can contact us on 0750 6710 592.
