The UK small business sector is in survival mode
UK businesses are going into survival mode as the UK continues to be in permacrisis. So what does that really mean, and how can you apply it to your small business?
There's never been a business landscape quite like this.
Pandemics, the cost of living, wars and unreliable governments are not new to us. It has never been possible to experience so many of these things at once, and on such a global scale, as we are experiencing today. The Collins Dictionary has chosen 'Permacrisis' as the word of 2022 because it describes living in an era of constant upheaval and uncertainty. There is, as fortunate or unlucky as it may be, a global understanding of the difficulties businesses are facing at the moment.
As a result, many business owners, especially millennials, are struggling to survive the winter.
Businesses in survival mode prioritize maintaining themselves over launching new strategies, campaigns, or projects.
This is the metaphorical equivalent of keeping the lights on in your company. Laying low, focusing on the essentials, laying more foundations, and waiting until the brunt of the financial storm passes is the best thing you can do.
Thousands of British small businesses are being forced to make survival mode a priority over the next six months - we explore whether this should be your main objective, too.
What makes businesses choose survival mode over everything else?
YouGov conducted research commissioned by Meta, polling over 1,000 British small business decision makers with fewer than 50 employees:
In the coming year, almost a third (31%) of small business decision makers worry that their companies will not be able to meet their outgoings
Over a quarter (26%) admit to using less electricity to save money
Two in five (40%) say reducing costs would be crucial to their firm’s future success
If small businesses hunker down now, they will likely be in a much better position in six months than businesses with no strategy or plan, who end up panicking and trying a number of random strategies that waste time, resources, and money.
According to Steve Hatch, VP of Meta Northern Europe, UK businesses are developing the new "survival mindset" right now, with many still planning for growth.
Survival mindset doesn't necessarily mean drastic changes or hiding away, but rather cultivating greater resilience and determination than ever before.
Especially in this current climate, foolhardy actions could lead to disaster. Whenever possible, you will want to operate and maintain your business the tried-and-true way if you want it to survive and prosper.
How should businesses proceed?
It's not all doom and gloom in the coming months. It is still possible to set your business up for future growth despite the tough months ahead.
It is possible for businesses to maintain or even increase their profits by understanding the drivers of customer need in the current climate and adapting their strategies accordingly.
Here are a few things you can do to keep your business afloat while we wait for better times globally and socially:
Keeping costs low is key
Businesses need to shop around to find the best deals at the moment - whether it's finding the best electricity rates or quality accounting software that keeps track of incomings and outgoings. Now more than ever, anything that can make your life easier and possibly save you money is essential.Focus on existing customers
Since the majority of the work in marketing and acquiring existing customers has already been done, your existing customers can be a saving grace in these times. You may already have a level of trust and affinity with them. Keep nurturing those relationships so they can become even more stable and loyal.Make deals available
You may be able to demonstrate empathy for people's struggles at this time, and it may be the trigger that causes them to choose your business over another (resulting in profit reaching your pocket, instead of someone else's).Protect your staff
Most businesses have decided that it is better to retain your current employees in this climate than to waste energy and damage morale searching for new employees. The Meta research indicates that nearly a fifth (19%) of small British businesses have raised salaries in the last six months. One in ten bosses (9%) have also given their employees a one-time or regular bonus, and one in twenty have provided pay advances and direct assistance with bills.
Michelle Ovens CBE, Founder of Small Business Britain, says:
“I’ve been fortunate enough to meet thousands of small business leaders throughout my career, and there is no denying the grit, determination and ambition they possess. However, many will be focused solely on survival as they face some of the most complex economic conditions in recent memory. It’s a positive step that large businesses are stepping in to offer support such as hosting Meta Good Ideas Studios, so small businesses are best equipped for these challenging times.”
Follow these tips to help small businesses weather this storm and others in the future. Contact Zyla Accountants today for support with your startup or small business. We’ll be happy to support you make the right decisions for your business accounting and bookkeeping requirements.