With the festive period finished and 2015 drawn to a close, this month marks the arrival of 2016 and, for some businesses across the country, the start of a new financial year. The good news for those entering their first quarter is that the financial outlook for the year ahead is optimistic with experts forecasting promising economic growth. If these predictions are correct, consumers will be more likely to spend their hard earned cash and UK businesses will be impacted positively as a result. With this being the case, it is surprising to see then that a recent study has shown that a large portion of UK businesses are unenthusiastic about their 2016, with others also very cautious when it comes to predicting their company growth for the upcoming year.
This study was conducted by YouGov who surveyed small-to-medium sized enterprises (SMEs) to find out how they thought their business would fair over the next 12 months. The results showed that just over more than half of those questioned expected their businesses to grow in 2016, which left a significant 44% who said they didn’t believe their business would grow at all this year. What’s more, almost a third of the sample put their business growth estimate at less than 5%, with a further 23% expecting to grow by no more than 10%. This overwhelmingly shows that even with a positive economic outlook for 2016, there is still a great feeling of uncertainty amongst UK SMEs about the year ahead.
So what is causing this pessimistic attitude amongst many UK businesses?
Well firstly one of the main reasons businesses may be wary of their 2016 prospects is a number of key factors affecting the everyday administrative process that will only increase in influence as the year continues. From Britain’s potential EU exit and legislation such as the Consumer Rights Act to skill shortages and a struggle to gain financial backing, there is a lot for businesses to consider with the true impact of these still very vague to business owners. With these variables presenting major tests for SMEs and some larger businesses too, it is no wonder that so many are worried or unsure about what 2016 holds for their company.
So the big question is, what can UK businesses do to ensure that they have a successful 2016?
The answer to this is that while it can be difficult for SMEs to move from opportunistic to more deliberate business planning, having a sound strategic direction is vital to the success of UK businesses in 2016. The problem is however that due to a lack of staff and information on how a UK withdrawal from the EU may directly affect their business operations, many SMEs will not have a 2016 business strategy in place. This was highlighted in a recent study, again by YouGov, which showed three in four business leaders encountering these current difficulties are struggling to plan ahead as a result.
That being said, the lack of yearly planning amongst SMEs is not a new issue. In a paper from Business Information and Skills (BIS) conducted a couple of years ago found that 46% of SMEs do not plan at all. This was both in terms of producing regular management accounts or having a formal written business plan. If these small and medium businesses are to survive the problems that 2016 may decide to throw at them, this is one bad habit that needs to be changed. Luckily with the year only just beginning, it is not too late for businesses to begin looking into creating a strong strategy for growth that will assist them in effectively tackling the challenges of the demanding year ahead.
Organise Your Business With OrderWise
By using the extensive reporting capabilities of OrderWise, businesses of all sizes are able to utilise the vast amount of accurate information at their disposal in order to devise a comprehensive business strategy year-on-year. With OrderWise Business Intelligence, businesses are able to gain detailed analysis of their entire operation, easily drilling down to find the root cause of issues within their processes upon which improvements can then be made. At-a-glance interpretation of this and other key business data can then be achieved through the use of 200+ standard reports and over 500 dynamic KPI dashboards, helping companies to successfully develop their yearly performance. With advanced methods of accurately forecasting purchasing requirements based on lead times and previous usage also available to ensure goods are kept cost-effective with stock levels correctly maintained, OrderWise offers businesses all the tools they need to always strategise effectively.
So although there is admittedly a lot of uncertainty regarding a number of key business issues that will no doubt come to the forefront in 2016, businesses can prepare themselves for these factors coming in to play with a good business strategy. By having a detailed, carefully organised strategy in place based on accurate reporting, UK businesses can ensure they start a potentially testing year on sure-footing.
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