It’s no secret that recent years have been challenging for UK SMEs, from the disruption of the pandemic to rollercoaster utility prices to recent supply chain issues in global shipping. While many have been anxiously awaiting a new ‘normal’, the reality seems to be that change is here to stay.
To an extent, this has always been the case – markets, consumers, and businesses all change – but the pace of variation and the pressure that accompanies it feels different today. In a globalised, technology-driven economy, owner-managers and their customers have more choices than ever. It’s no surprise that choosing where to focus can feel daunting – but no choice can be as damaging as making the wrong one.
Here we look at some of the fastest-evolving areas of work and business, and how you can approach them to benefit your company and your customers.
1. Data is now a non-negotiable
The saying “what gets measured, gets managed” has never been truer.
In the past, businesses often relied on consultants to assess their performance, but today, owner-managers can measure almost every aspect of their operations using increasingly intuitive digital tools. Data-driven decision-making is not just a luxury but a necessity in an era where businesses must adapt quickly to market changes and customer expectations.
Understanding the right metrics is crucial.
For example, retail businesses need to focus on inventory management, supply chain visibility, and enterprise resource planning (ERP). These tools can help ensure that popular products are always in stock and that supply chains run smoothly.
Service industries, on the other hand, should focus on customer sentiment through CRM systems, tracking delivery efficiency, and monitoring repeat business to maintain customer satisfaction and loyalty.
- Start by identifying the key performance indicators (KPIs) that matter most to your business.
- Implement digital tools like cloud accounting software to keep your financials clear and up-to-date.
- These systems can(and should) be integrated with other business operations, providing you with real-time data on cash flow, expenses, and profitability.
For bonus points, this is an opportunity to work more closely with your accountant to interpret these numbers and develop strategies that drive growth and efficiency.
2. Sell everywhere you can
E-commerce has become a significant revenue stream for many businesses, and SMEs can no longer afford to ignore the online marketplace.
Beyond simply having an online presence, businesses now have the opportunity to explore a variety of sales channels, including partnerships, third-party platforms, multi-channel retailing, and subscription models. Diversifying sales channels not only spreads risk but also opens up new revenue streams and customer bases.
For instance, selling on platforms like Amazon or eBay can extend your reach far beyond local customers, while subscription services offer a steady, predictable income. Additionally, bundling products or offering personalised options can increase the value of each sale and enhance customer satisfaction.
- Start by assessing your current sales channels and identifying opportunities to expand.
- Consider setting up an e-commerce site if you haven’t already, or look into partnering with third-party platforms to reach new customers.
- Explore subscription models or personalised product offerings that can add value for your customers and increase loyalty. Tying into the above - digital marketing tools can track the success of each channel and help you adjust your strategies accordingly.
3. Think in clusters
The UK government’s focus on regional innovation clusters offers a significant opportunity for SMEs to collaborate, innovate, and grow.
These clusters bring together businesses, academic institutions, and government bodies to foster innovation in sectors like renewable energy, health technologies, and digital innovation. Being part of such a cluster can provide SMEs with access to funding, R&D resources, and invaluable networking opportunities.
Local clusters are tailored to the unique strengths of each region, making the support offered highly relevant and impactful. By participating in these clusters, SMEs can benefit from shared knowledge, pooled resources, and the potential for joint ventures that drive innovation and business growth.
- Identify the innovation clusters relevant to your industry and region and explore opportunities to participate.
- Engage with local business networks, attend cluster meetings, and collaborate with other businesses or academic institutions within the cluster.
- Innovate UK’s Launchpad programme is an excellent resource for SMEs looking to tap into these clusters. Additionally, explore available funding opportunities and grants to support your R&D activities.
4. Make automation your friend
For many businesses, labour costs are one of the most significant expenses. Automation offers a way to reduce these costs while freeing up your team to focus on more valuable work.
From automating financial processes like expense tracking to streamlining customer service and order management, automation can significantly improve efficiency, reduce errors, and enhance the customer experience.
Automation ensures consistent service delivery, reducing the pressure on staffing and allowing businesses to operate smoothly even during peak times. It also allows your team to focus on higher-value tasks that contribute directly to growth and innovation, rather than getting bogged down in repetitive manual work.
- Start by identifying repetitive tasks within your business that could be automated.
- Consider implementing software solutions for expense management, customer service automation (like chatbots), and order processing.
- Make sure to involve your team in the process, as they can provide valuable insights into which tasks are most time-consuming or error-prone.
By automating these tasks, you can lower overheads, improve team satisfaction, and deliver a more consistent customer experience.
5. Create community
In a rapidly changing market, strong customer relationships can be the anchor that keeps your business steady. Building a community around your brand not only fosters loyalty but also provides valuable insights into your customers’ needs and preferences.
Engaging with your customers regularly through social media, newsletters, or events helps you stay connected, understand their challenges, and adapt your offerings to meet their evolving needs.
Supporting your customers through personalised service, loyalty programmes, and exclusive offers can turn one-time buyers into long-term advocates. This level of engagement is crucial for maintaining a stable customer base and ensuring steady revenue, even in turbulent times.
- Start by conducting surveys or direct outreach to understand your customers’ needs and challenges better.
- Use social media and email marketing to keep them informed about new products, promotions, or company news.
- Consider hosting events, either virtual or in-person, to build a sense of community around your brand. Implement loyalty programmes or offer exclusive discounts to reward long-term customers, ensuring they feel valued and appreciated.
By fostering these relationships, you can create a stable foundation for your business that endures even as the market changes.
Stay informed, no matter what happens
At Haines Watts, we’ve got decades of experience helping thousands of businesses build and achieve their dreams. While we can’t predict where the market will move, we can make sure you have the right tools, processes and data to know where you stand and make smarter decisions.
To talk to a Haines Watts advisor and find out how we can help, why not book a call today?
