7 Challenges For Small Businesses Over The Next Twelve Months
Nobody said it would be easy… and the remainder of the year leading in to 2023 will be a test for many businesses.
However, being forewarned is forearmed, and business owners across the country are already facing many of these challenges head on…
📌 Value of the pound dropping
The weak pound has an indirect or direct impact on all businesses. It means that imported goods and services are becoming more expensive, while many consumers are reducing their spending. This combination puts enormous strain on margins and profitability.
📌 Rents for commercial properties
Commercial landlords will exert greater pressure on SME owners. I am already seeing many business owners where landlords are becoming less tolerant of late, missed, or rescheduled rent payments.
📌 Increasing inflation
According to the most recent data, the UK Consumer Prices Index reached 10.1% in September, with food inflation at 14.6%. The rate is faster than expected, squeezing profit margins and making it more difficult for businesses to compete.
📌 Energy prices
It’s been well documented… but in short, there is no price cap on business energy. However, the government’s Energy Bill Relief Scheme will reduce the unit rate paid by businesses. As a result, there is some protection from further price increases, and business owners will be supported for six months beginning in October.
📌 Hangovers
As a result of Brexit and Covid, there are still a few ‘hangover’ issues that have not yet been resolved. You only have to look at the impact of the pandemic in parts of China to realize that supply chain issues and entrenched inflation are not a passing fad. The ongoing conflict in Ukraine will have long-term consequences.
📌 Credit crunch
Many creditors are increasingly pressuring SMEs to repay their debts, making business loans less advantageous. This can put a strain on already scarce funds.
📌 Workforce & Expertise
Few businesses have been unaffected by the recent tightening of the labor market, which has made growth more difficult and increased overheads. Access to outside expertise required to grow and scale a business will be equally difficult for many business owners.
