2022 has been another challenging year for small businesses. But with the gradual lifting of pandemic restrictions throughout the year, there have plenty of green shoots for entrepreneurs.
From rebounding sectors to new and exciting start-ups, it’s time to get your small business ready for what 2022 might bring.
Here are five key new year’s resolutions for your small or medium-sized business to see you through.
How has 2021 been for small businesses?
There’s no doubt that parts of 2021 were challenging for small businesses. But with most of the restrictions put in place as a result of the global coronavirus pandemic largely lifted, there have definitely been some green shoots for small businesses.
For the first time in six months, small business output started rising from March at the fastest rate since November 2016. And, while only a few businesses reported a notable improvement, over half of businesses reported no effect to their turnover when compared with normal expectations for the year.
All this speaks to a growing optimism many small businesses have enjoyed as the year has unfolded.
This optimism is a significant part of the reason why, in the first half of 2021, the number of new businesses in the UK increased by 14%, well above the global average of only 6%. This wave of entrepreneurialism saw almost 80 new businesses created every hour in the UK, so it’s clear that small and medium-sized enterprises (SMEs) are looking to make up for lost time.
While the realities of trading during Covid continues to be a source of concern, improved local supply chain solutions mean that SMEs are starting to thrive once again.
But while starting a new business can feel like an achievement in itself, much of the hard work still lies ahead. Around 20% of new businesses typically fail within a year, while 60% are expected to fail within their first three years.
So, with the UK experiencing an SME boom, the time to position your business for future survival is now.
Why do so many SMEs fail?
Starting a business is about taking risks, and while some of these risks will bring rewards, many won’t pay off. There are some common pitfalls that many SMEs make that can compound their business’ troubles. Some of the most common reasons for SME failure are:
Poor use of technology: If your business is still struggling to adapt to the latest technological advances and you can’t provide the smooth user journey that customers have come to expect, you could be losing out to your competitors.
Supply chain problems: Supply chain disruption is a major source of trouble for UK businesses, and an inability to respond accordingly to these ongoing problems could be a major issue for your business.
Security: Cybercrime has boomed since the onset of the pandemic.
Labour shortages: Another issue plaguing small businesses is lacking the right skillsets among your team to drive a business forward, meaning recruitment should be a focus for the new year.
It’s vitally important for SMEs to have the right advice at the right time, so speaking to a financial or legal adviser is always a good idea.
However, there are also some essential resolutions that SMEs could make to get off to a positive start in the new year.
Whether it’s offering your teams flexible or hybrid working, trying out new technology, or adjusting your supply chains, flexibility has fast become a condition for business survival in the UK.
Particularly when it comes to the financial and legal implications of big businesses decisions, it is always a good idea to seek expert advice, but having flexibility built into your business model will put it in great shape as you go into what could be another bumper year.
Focus on the wellbeing of your employees
Small businesses are only as healthy as their employees, so make the wellbeing of your team members one of your new year business goals.
In the earliest stages of your SME growth, having an engaged, attentive and motivated workforce is one of the best ways you can run a steady and sustainable business.
Review your business plan and future goals
However your small business fared in 2021, it’s a safe bet that many business plans have been altered drastically over the past two years.
Timelines and growth projects have been pushed back, future goals have been delayed or, in many cases, completed overhauled, and KPIs may have wavered.
Make a small business new year’s resolution to set realistic goals. Review your business plan and consider the timelines and ambitions that your business is currently locked in to.
Consider the learnings from 2021 and any perceived challenges on the uncertain road ahead, and make sure these are taken into account when setting out what you plan to achieve in 2022.
Find the right talent
Major labour shortages are proving to be a persistent problem for many sectors in the UK. With Brexit bringing added complications for hiring international workers and certain sectors struggling to recover in the wake of the pandemic, recruitment is where many SMEs will sink or swim in 2022.
You may need to reflect on any skills gaps in your team, whether your growth plans for the new year could benefit from more hands or deck or if areas of the business might need to be restructured to improve efficiencies.
Whatever your new year’s recruitment resolutions are, be prepared to present a competitive offering to attract and retain the best talent in 2022.
Bolster your online presence
Quite simply, if your business doesn’t rank on searches or is invisible on social media, your SME is going to struggle.
A significant and growing proportion of sales are now done online, so if the digital side of your business isn’t up to scratch, bolstering your online presence needs to be top of your small business new year’s resolutions.
Running an SME isn’t easy, and with the added uncertainties of the ongoing global pandemic likely to stretch on into 2022, your business needs a trusted adviser to help you grow your business.
Whatever kind of expertise or support you need, you can find an adviser to match your needs on Unbiased.