It’s no secret that times are tough for small and growing businesses. 90% of startups fail, and following the resilience and unexpected agile opportunities presented by the pandemic, last year was a particularly difficult period: over 3,000 UK start-ups ceased trading in 2023. The majority of failed business ventures were backed by private equity and sufficient capital, evidencing that expert advice and financial support will only get a company so far: leaders must find a gap in their market, apply the right resources and capability to service their target audience, and be supported by the right partners in every area, not just finance.
With global uncertainty and economic difficulties setting the stage for the rest of the year, 2024 will present yet more challenges for SME leaders. But how can Founders and Managing Directors face these challenges head on to deliver growth out of adversity?
Generate Connect surveyed 200 small business owners and leaders on their challenges and predictions for the future. This report details insights from business leaders across the UK, including:
- The surprising differences between start-up and SME business challenges according to sector and size
- The most significant problems that owners and Founders are grappling with day-to-day and long-term
- The root causes and hidden factors behind these significant challenges – what’s really going on
- What start-up and SME leaders are doing to tackle these challenges – and what activities are truly delivering return on investment
- How the economic and global climates are likely to impact the future of small business success in the UK going forward.
Download the report to discover the experiences, insights and ideas of other growing business leaders to see how your organisation can thrive in the year ahead.
Greatest Challenges Facing SMEs & Start-Ups
In trying economic times, it’s not shocking that smaller businesses are most challenged by cash flow and financial stability, however what might surprise is that competition from new entrants is equally as much of a problem as competition with long-established large competitors. NatWest report that a record 900,000 new companies launched in 2023 – a 12% increase on the year before – driven mainly by online retailers entering the market, with takeaway food enterprises also leading the start-up boom.
Whilst excellent news for entrepreneurial spirit and sider choice for consumers, small businesses now face more competition than ever before. In 2024 it’s even more important for growing companies to stand out with a powerful brand and proposition that truly differentiates them in a crowded marketplace.
Financial and competitor challenges are being experienced by start-ups and SMEs across industries, but sector and size have a marked impact on the next most urgent challenges for growing businesses this year.
Most significant challenges by industry:
- Chauffeur/Private Hire – Cash flow and financial stability, Competition from more established businesses
- Courier Delivery/Last Mile & HGV – Higher Costs/Inflation, Cash flow and financial stability, Competition from more established businesses, Competition from new market entrants eg startups,
- Finance – Cash flow and financial stability, Competition from more established businesses
- Healthcare & Fitness – Cash flow and financial stability, Competition from more established businesses – overwhelmingly 100% say these two
- IT – Competition from more established businesses, Competition from new market entrants eg startups
- Professional Services – Cash flow and financial stability, Competition from more established businesses
- Retail – Cash flow and financial stability, Competition from new market entrants eg startups
- Security – Cash flow and financial stability, Competition from more established businesses
Most significant challenges by size:
- Under 50 staff – Cash flow and financial stability overwhelmingly top, then Competition from more established businesses
- 51-100 – Cash flow and financial stability and Competition from new market entrants eg startups both equal
- 101-250 – Competition from more established businesses and Legislation/Compliance both
Download the Free Report to discover:
- Root Causes of Significant Company Challenges – Although macroeconomic factors and competitor advantage present major obstacles for SMEs, the root causes of most smaller business challenges often lie in strategic direction, high-level decisions and daily tactics. Founders and owners have a level of autonomy and choice about how to move forward, even if these options are not immediately clear or accessible, in a few vital areas.
- Effort vs Return: What’s Actually Working for New Businesses – Founders and leaders are constantly investing, reinventing, creating and working harder than ever to maintain business continuity despite an uphill struggle. But how many of the strategies and tactics business leaders pour their time, efforts and money into are actually paying off – and may pay off for others?
- The Heart of the UK Economy – What Business Leaders are Striving For – Amongst the many challenges stacked against small business leaders, there is a lot of optimism about the near future, with many hopes and goals leading the UK’s business innovation. Managing Directors reveal the major professional goals that their company is striving for in the year ahead and the actions they are planning to take to achieve them.
With a range of challenges and an even wider range of choices, how can SME and start-up entrepreneurs make the right moves towards maximum growth? Selecting the best partners for the best support is vital.
Solve the Number One Root Cause of Your Business Challenges in 2024 and 2025
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