{"id":5503,"date":"2024-01-02T10:35:38","date_gmt":"2024-01-02T10:35:38","guid":{"rendered":"https:\/\/www.bainesjewitt.co.uk\/blog\/?p=5503"},"modified":"2024-01-02T10:35:40","modified_gmt":"2024-01-02T10:35:40","slug":"our-predictions-for-the-sme-business-economy-in-2024","status":"publish","type":"post","link":"https:\/\/www.bainesjewitt.co.uk\/blog\/our-predictions-for-the-sme-business-economy-in-2024\/","title":{"rendered":"Our predictions for the SME business economy in 2024"},"content":{"rendered":"

Now that we have entered 2024, our accounting team has been making their predictions and discussing how best to advise our clients on preparing for upcoming challenges.\u00a0<\/span>\u00a0<\/span><\/p>\n

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Before we make predictions on SME prospects for 2024, however, let\u2019s look back on last year to provide some context.<\/span>\u00a0<\/span><\/p>\n

We feel that UK businesses are still recovering from several major economic events like the pandemic, Brexit, and multiple Prime Ministerial changes.<\/span>\u00a0<\/span><\/p>\n

All these elements have drastically affected the business landscape, which is likely to continue this year \u2013 unfortunately.\u00a0<\/span>\u00a0<\/span><\/p>\n

Similarly, the sudden introduction of Artificial Intelligence (AI) systems, and the scramble of businesses to react to it, significantly influenced the economic landscape during 2023 which will no doubt continue this year.<\/span>\u00a0<\/span><\/p>\n

With that in mind, here are some of the predictions our team have made regarding the next 12 months and our advice on how to react to these challenges.\u00a0<\/span>\u00a0<\/span><\/p>\n

Continued political and economic uncertainty<\/span><\/b>\u00a0<\/span><\/p>\n

We think that, with a general election on the horizon, political and economic uncertainty is inevitable in 2024.\u00a0<\/span>\u00a0<\/span><\/p>\n

SMEs should try to brace themselves for potential policy shifts and their impacts on taxation, energy costs, and funding by maintaining robust financial practices.\u00a0<\/span>\u00a0<\/span><\/p>\n

The key, in our opinion, is to stay flexible and ready to adapt to new government policies and economic scenarios by having a higher level of liquidity than would usually be recommended.<\/span>\u00a0<\/span><\/p>\n

Increased use of AI in everyday business operations<\/span><\/b>\u00a0<\/span><\/p>\n

Generative AI is poised to change the fundamental way in which small businesses operate.<\/span>\u00a0<\/span><\/p>\n

Whether that\u2019s by automating customer service or enhancing product design, AI is going to offer you opportunities for efficiency and innovation that are yet to materialise in a meaningful sense.<\/span>\u00a0<\/span><\/p>\n

We suggest that you embrace these changes and investigate the applications that AI might have within your business model.<\/span>\u00a0<\/span><\/p>\n

Invest wisely and don\u2019t just jump at the first AI product that comes your way \u2013 but nonetheless analyse whether an AI investment could help you grow.\u00a0<\/span>\u00a0<\/span><\/p>\n

Soft skills are going to become more valuable\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n

As automation and AI take over routine and mundane tasks that humans were previously responsible for, the human element of service is going to become more valuable.\u00a0<\/span>\u00a0<\/span><\/p>\n

Skills like emotional intelligence, effective communication, and creative problem-solving will be at a premium.\u00a0<\/span>\u00a0<\/span><\/p>\n

Small businesses can gain a competitive edge by nurturing these skills within their teams as well as employing individuals who are naturally good at these things sooner rather than later.<\/span>\u00a0<\/span><\/p>\n

Having said this, the skills shortage in many sectors is likely to remain a significant challenge in 2024.\u00a0<\/span>\u00a0<\/span><\/p>\n

Small businesses can either focus on upskilling and reskilling their workforce, particularly in areas related to new technologies or invest in new technologies that AI could provide to solve this problem.\u00a0<\/span>\u00a0<\/span><\/p>\n

Collaborating with educational institutions and offering in-house training can be effective strategies in organically growing the skilled workforce upon which you can recruit in your area.<\/span>\u00a0<\/span><\/p>\n

Another option might be to outsource or recruit remote\/digitally based colleagues into your business.<\/span>\u00a0<\/span><\/p>\n

Remote and digital workspaces<\/span><\/b>\u00a0<\/span><\/p>\n

Continuing the discussion of employee and staff challenges, SMEs need to look at digital and remote working solutions this year.\u00a0<\/span>\u00a0<\/span><\/p>\n

The trend towards remote and distributed work hasn\u2019t changed since the end of the pandemic, as many thought it might.\u00a0<\/span>\u00a0<\/span><\/p>\n

Many employees now prefer (and actively look for) jobs that provide them with the ability to work from home or have a flexible working pattern.<\/span>\u00a0<\/span><\/p>\n

SMEs can benefit from this trend by having access to a wider talent pool when offering flexible working arrangements, as well as possibly reducing costs on physical office space.\u00a0<\/span>\u00a0<\/span><\/p>\n

Will we see a growth in sustainability?\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n

Some data suggests that customers are drawn to businesses that demonstrate environmental responsibility, whereas it is less crucial in other areas.\u00a0<\/span>\u00a0<\/span><\/p>\n

We think it\u2019s best to be on the safe side with this issue.<\/span>\u00a0<\/span><\/p>\n

It might not matter to some customers whether you are an environmentally friendly business or not, but others might be actively turned away by your practices if you reject sustainability.<\/span>\u00a0<\/span><\/p>\n

Whilst it might not hinder your profitability, it doesn\u2019t hurt to have sustainability goals and could even benefit you in some environmental tax liabilities.\u00a0<\/span>\u00a0<\/span><\/p>\n

We think that, in 2024, SMEs should look for ways to reduce their carbon footprint, from sourcing locally to adopting green technologies \u2013 you have very little to lose in this endeavour and plenty to gain.\u00a0<\/span>\u00a0<\/span><\/p>\n

The rise of a data economy<\/span><\/b>\u00a0<\/span><\/p>\n

Data became an even more valuable asset in 2023 and will no doubt grow in its usability this year.\u00a0<\/span>\u00a0<\/span><\/p>\n

Small businesses should look at ways to strategically use data and data analytics to improve operations and create new revenue streams.\u00a0<\/span>\u00a0<\/span><\/p>\n

This could involve anything from customer analytics to data-driven product development.<\/span>\u00a0<\/span><\/p>\n

As the old adage goes: \u201cKnowledge is power\u201d and an SME with more information than their competitor has a significant edge in the marketplace.\u00a0<\/span>\u00a0<\/span><\/p>\n

How to achieve your goals this year<\/span><\/b>\u00a0<\/span><\/p>\n

To ensure your business survives, thrives and grows this year, we recommend that you adopt several strategies:<\/span>\u00a0<\/span><\/p>\n