As we approach the end of the year, many small business owners will be thinking about their goals and challenges for 2020.
The good news is that 86% are confident they will achieve their goals for the next 12 months, according to a recent survey by Vistaprint. It's great to see so many small business owners feeling optimistic about the year ahead.
This was mirrored in our own quarterly economic survey. Business confidence bounced back in Q4 2019, with 51% of respondents expecting turnover to improve & 43% believed profits will increase.
Despite the optimism, many small business owners will still feel some apprehension of what's to come.
In this blog post, we take a look at some of the biggest threats small businesses are likely to face in 2020 - and how you can protect your company against them.
Of the 500 people who took part in the Vistaprint survey, 38% said they think they will struggle in 2020 due to bills and expenses rising. With business rates rising, many small business owners are worried about the impact it could have on their business.
Managing costs is a top priority for small business - running out of cash is a big issue. But it can be difficult to know where to focus your attention.
Here are some tips for protecting your cashflow:
- Keep on top of tracking your finances
- Monitor supplier costs and look for where you can make savings without compromising on quality
- Bill early
- Tighten credit control processes
- Initiate a regular payment system, i.e. encourage clients to pay using direct debit or standing order, to pay online or via BACS
- Stick to budget
- Assess which costs are essential and which can wait.
Lack of a talent pipeline
Recruiting talent will always be a challenge for small businesses, but the struggle is getting harder. Half of UK businesses say it takes longer to recruit people today compared to five years ago, with 21% saying it now takes up to six months to fill a skilled role.
Our own quarterly report showed that 55% of businesses recruiting have experienced difficulties, with the hardest positions to fill classed as technical/skilled manual and professional/managerial.
A strong talent pipeline streamlines the hiring process and reduces your time-to-hire. The first step is to identify your company’s long-term goals and needs. Then you can start to search for qualified candidates through social platforms, networking events, referrals, universities and schools. And from the moment you bring new talent into your workforce, you will need to invest in their ongoing training and development within your company.
September 2020 will also bring the introduction of the new T Levels, which promise a new route into employment for young people and an opportunity for employers to invest in and nurture talent from entry level.
The T Levels will follow GCSEs and will be equivalent to 3 A Levels. The courses have been developed in collaboration with employers and businesses so that the content meets the needs of the industry and prepares students for work. To find out more, visit the new Government website dedicated to T Levels here.
Continued risk of cyber attacks
Small businesses across all industries are at risk of cyberattacks. And an attack could prove devastating - research shows that 60% of small businesses that fall victim to serious security breaches go out of business within six months.
Cybersecurity is by no means a new risk. But with technology advancing rapidly, cyberattacks are likely to become more sophisticated. Experts predict a rise in AI-powered cyberattacks in 2020, as well as things like voice-phishing schemes, in which employees are tricked into sending money or revealing sensitive information after getting voice messages and calls that sound like they’re coming from the MD or other executives.
As cyberattacks get smarter, so too must your approach to protecting your small business. Adopting a a comprehensive security strategy and policy to prevent a cyber threat and to mitigate damage should an incident occur, is imperative. The more prepared you are, the easier it is to both protect your assets and recover from an attack.
Of course, we couldn't write this blog post without mentioning Brexit. The Conservatives' landslide win in the General Election last week means Boris Johnson will now be able to push through Brexit on his terms, and Britain is set to leave the EU at the end of January 2020.
Brexit will undoubtedly be a disruptive force for all small businesses, but especially those selling high volumes of goods or services from the EU and those that are heavily reliant on EU staff.
For the short-term it will be 'business as usual', but there are things you can be doing to prepare your small business for Brexit and beyond. Take a look at our previous blog posts on Brexit to see how it might impact businesses (the good and the bad) and what you can do to prepare:
The optimism of small business owners revealed by the Vistaprint survey shows that despite the political and economic climate, the country is still full of entrepreneurial spirit. Mitigating the risk of common threats as we enter a new year - and a new decade - are crucial if you want your company to thrive.