UK small businesses in ‘survival mode’ over next six months

It’s time to be honest – there has never been a business landscape quite like this before.

We’re not the first generation to experience pandemics, a cost of living crisis, war and unreliable governments. But never in living memory has there been quite a measurable onslaught of all of these things all at once, and on such a global scale.

There’s a reason why ‘Permacrisis’ has been chosen as the Collins Dictionary word of 2022 – a term that describes living in an age of continued upheaval, or an extended period of instability and insecurity. The one thing, as lucky or unlucky as it may be, is the fact that there is a global understanding of the struggles businesses are facing right now, as it has been affecting everyone.

The result is that many business owners, especially millennial ones, are having to push through the winter in ‘survival mode’.

What is ‘survival mode’?

Survival mode is where a business prioritises keeping itself going over any new or experimental strategies, campaigns or projects.

It is the metaphorical ‘keeping the lights on’ in your business. Doing whatever is necessary and within reason to lay low, focus on the essentials, lay more foundations and wait for the worst of the financial storm to blow over.

Plenty of British small businesses are being forced to make survival mode a priority over the coming six months – we explain whether this should be the main objective for your business right now, too.

Why are businesses choosing ‘survival mode’?

According to research conducted by YouGov and commissioned by Meta, who polled over 1,000 British small business decision makers of companies with fewer than 50 employees:

• Almost a third (31%) of the small business decision makers worry that their businesses won’t be able to keep up with their outgoings during the year ahead
• Over a quarter (26%) admit to using less electricity to save on bills
• Two in five (40%) say reducing costs would be crucial to their firm’s future success

Small businesses are recognising that if they hunker down now, in six months they will most likely be in a far better position than other businesses who have no strategy or plan, then end up panicking and trying to employ a multitude of random strategies that waste their time, resources and money.

Regarding the new “survival mindset” that UK businesses are developing right now, Steve Hatch, VP of Meta in Northern Europe emphasises “the incredible resilience, ambition and resolve among our small business community, with many still planning for growth.”

The survival mindset doesn’t necessarily mean drastic changes or hiding away, but simply cultivating more resilience and determination like never before.

This is especially important in this current climate because foolhardy actions in the coming months could lead to disaster. If you want to maintain longevity in your business, there will be times like this where tried-and-true methods of running and maintaining it will be safer, help to mitigate risks and allow the business to see better days.

What should businesses do to survive? (Our top four tips)

If you’re feeling bleak about the coming months, all is not lost. Even in the tough months ahead, opportunities remain to set your business up for future growth.

By understanding the drivers of customer need in the current climate and adapting their strategies, businesses can position themselves to take advantage of the situation and maintain or even increase their profits.

As we wait for better times globally and socially, here are a few things you can do to keep your business afloat:

1. Focus on keeping costs down – Businesses need to be shopping around to get the best deals at the moment – with everything from trying to find the best electricity rates, to quality accounting software to stay on top of your incomings and outgoings. Anything that can make your life easier and potentially help you cut costs in the process is now more vital than ever.
2. Focus on existing customers – Your existing customers can be a saving grace in these times because the bulk of the work in marketing and acquiring them has already been done. A level of trust and affinity between them and your business may already exist. Continue nurturing those relationships so that they can become an even more stable and loyal customer base.
3. Offer deals – If you offer deals at this time, it may show that you are empathetic to people’s struggles and trying to help, and may be the trigger that causes a person to choose your business over another (resulting in the profit reaching your pocket, as opposed to someone else’s).
4. Protect your staff – Good employees make a good company, and in this climate, most businesses have determined that it is likely better to retain your current employees than wasting energy and damaging morale by trying to seek new employees. Recent research from Meta finds that nearly a fifth (19%) of British small businesses have increased their staff’s salaries in the past six months. Almost one in ten bosses (9%) have also given their employees a one-off or regular bonus, with one in 20 giving pay advances and direct support with bills to staff.

By following these tips, small businesses can make sure they are well-positioned to weather this and other potential storms in future.

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.

– Michelle Ovens CBE, Founder of Small Business Britain