Why you should gear your small business towards growth in 2015
With slow but encouraging economic growth in 2014, discover how to ensure your start-up is prepared to maximise its potential
2014 was another year of slow yet encouraging economic growth for the UK.
Whilst the unprecedented improvement witnessed in the first half of 2014 has slowed somewhat over the past few months, Britain is still expected to be the fastest growing G7 economy. The IMF has predicted a 3.2% overall rise, with the US registering a 2.2% increase in GDP. The global economic outlook for 2015 is positive; however the general consensus is that we aren’t out of the woods just yet.
So what does this mean for small businesses and their growth prospects for the next 12 months?
One thing that’s certain is that any economic growth witnessed recently has been driven by the world of small businesses and start-ups, particularly in the tech and service sectors, so it is important that business owners are adequately prepared to take advantage of this upsurge.
Access to funding and support
It’s no secret that small businesses and start-ups in particular have found it difficult these last few years when it comes to accessing the funds required to grow and develop. Banks are reluctant to lend to new prospects and so this makes it difficult to invest in new software, processes and, most importantly, people. However, there is a light on the horizon. In August, new government legislation was announced that means leading bands are now required to share the details of rejected firms with alternative lenders, helping businesses gain access to a wider choice of funding options.
The UK government is also doing its best to support entrepreneurs, with innovation-friendly start-up visas, tax breaks for angel investment, reform to the UK’s intellectual property regime, and the addition of Entrepreneur’s Relief.
This all comes as welcome news to businesses who rarely have the time or inclination to think beyond traditional lines of credit and is one of the reasons why the small business landscape of 2015 is more geared towards growth.
Growth over consolidation
Businesses that are able to grow through periods of economic slowdown will hold the competitive edge over those who decide to simply batten down the hatches and wait out the storm. The simple answer here is that an unprecedented digital revolution is making it easier than ever for small companies to become more competitive and in particular reach new markets. So called ‘Brand Britain’ commands a high premium when sold abroad, therefore trading on UK credentials can make all the difference to your bottom line.
Power to the people
A survey conducted by a commercial finance lender at the end of 2013 found that 44% of senior decision makers felt they did not have the right people in place in order to reach the business’ full potential.
Central to the growth of any business is having the right people on-board, people that share in your corporate vision and are able to help you realise the potential the business has. Particularly in the case of expansion into new markets, it’s essential to have your finger on the HR pulse from a recruitment, development and retention perspective. It’s also important to manage and maximise the potential of growing external relationships, therefore effective customer relationship management is essential too.
Just as small businesses can take advantage of the digital age to expand their business offering externally, so too can they harness the power of cloud-based HR to get the best out of employees internally. Many HR systems allow business owners to allocate training modules to certain individuals, report on expenses (particularly important for business travel) and book time off. This latter point is important to a start-up, as having just one or two members of staff off at the wrong time could lead to missed deadlines, unnecessary pressure and, most importantly, hiccups in the process of growth.
The environment for business growth is a fertile one in 2015. Make sure you’re ready to make the most of it.