Three-quarters of business owners think the rules of doing business have altered dramatically in the past year, according to new research, with increased competitor activity, more data-driven decision-making and the struggle to keep up with regulatory changes being key changes.
The survey of 1,003 SME owners by accountancy firm, Menzies LLP, shows that 88% of business owners think their biggest challenge in the year ahead is “unpredictable market demand”. Brexit and other uncertainties also mean more turbulent times are predicted.
The higher the business turnover, the more likely respondents were to agree that the rules of doing business had changed—91% of businesses with a turnover between £1m and £10m, and 93% of those with a turnover between £10m and £50m shared this view.
The top-five risk factors identified by SME owners were cash-flow difficulties; geopolitical uncertainty; breaks in supply; a lack of resources (management time and skilled people) and difficulties accessing finance.
Smaller businesses, with fewer than 50 employees, believe the most significant changes over the past year are increased competitor activity and a shifting regulatory outlook, whereas larger businesses, with more than 50 employees, believe business decisions are more data-driven and there is less time to weigh up the pros and cons.
Work-life balance is an issue for some—20% of business owners said their “work-life balance” is out of control and 64% said they regularly feel they lack support and are running their business on their own. One in ten reported lacking support at least once a day.
There were some age-related differences: SME owners aged under 40 stated that managing costs efficiently and delivering a quality product or service were their top priorities, while the over-40s put delivering a quality product or service and personal enjoyment top of the list.
Julie Adams, senior partner at accountancy firm, Menzies LLP, said: “SMEs have a much closer understanding than multinationals of how the rules of doing business have changed. This awareness combined with their size and agility has enabled many of them to adjust to the uncertain market conditions.
“The research shows that larger SMEs that employ more than 50 staff are acutely aware of the need to react to changes in market demand and make business decisions more quickly. For many, the ability to lay their hands on reliable and up-to-date data in a format that is tailored to the operational needs of the business is now critical.”
