What SMEs must do to survive and grow in 2022
The year of 2021 was a momentous one for SMEs throughout the UK, and saw substantial growth throughout the small business landscape in the UK. Now, as we head into 2022, there are new factors which small business must consider and obstacles they must overcome in order to continue to grow their business and flourish.
Omicron is currently a substantial factor affecting businesses in the UK, it is both nothing new and the next frontier of SME’s having to battle Covid. Whether or not Omicron will cause major impact on the economy remains to be seen, governments are unlikely to provide support additional large scale assistance to SMEs as they would prefer to keep the economy open and utilise various other tactics such as limited capacities and vaccine passports to manage the virus. Consequently, SMEs are going to need to take mitigating the impact of Covid into their own hands.
Another factor which SMEs must consider is the rapidly approaching new VAT legislation, which states that VAT-registered businesses must keep digital records and use software to submit their VAT returns, the change is due to impact over 1.1 million small businesses in the UK. Over 300,000 small businesses say they are not yet prepared for this change and have not prepared their businesses accordingly.
SME leaders in the UK must prepare their business to adapt and change quickly to the ever-changing business environment they are in, they can do this is several ways, most notably having enough liquidity, as well as cashflow to survive unexpected events. There is excitement surrounding the UK small business scene heading into 2022, and if they can take the necessary steps then another prosperous year could occur.
Reece Tomlinson, founding Partner of RWT Growth discusses what SMEs must do to prosper in 2022: “After a tough 2021, there are now further obstacles facing UK SMEs in 2022, but I am confident they can overcome them and continue to flourish. The swift turn to Plan B and rumoured implementing of further measures as cases rises from the government shows that the UK business landscape can change swiftly and with no warning. This is a small glimpse into what is developing into the future for UK businesses, with several Covid variants already emerging and more predicted to develop in the future, businesses must be ready to adapt at the drop of a hat and have an astute crisis plan in place.Their leaders must also successfully prepare their companies to navigate the ever-changing business environment caused by the Covid pandemic, the longer the pandemic continues, the more important a businesses adaptability becomes.
“There are four critical areas in which UK SMEs must address to ensure their businesses are ready to prosper in 2022, firstly you must do the upmost to protect your team, follow protocols and implement policies that ensure Covid is least likely to spread in your workplace. SMEs must implement these policies to ensure that it protects their ability to conduct business by ensuring their workplace is as Covid-free as possible.
“Secondly, SMEs must ensure they instil confidence, with the higher degree of confidence that customers have in your business relating to the more they come and do business with you.
“SMEs must ensure that they also get capitalised, meaning that the company has enough liquidity on the balance sheet to weather disruptions caused to your business and short-term lockdown measures implemented by governments. It is vital to ensure credit facilities are bumped as high as possible to give the SME more leeway if and when it is needed, also ensuring that there is adequate cash-flow for the business to continue to flourish.
“Finally, SMEs must be well stocked, rapid and unforeseen changes in the business environment (such as the Omicron variant) will likely further challenge the already constrained global supply chains, subsequently causing many retailers to state that as much as 30% of their inventories are in transit, meaning that SMEs will have less products available to sell. It is pivotal that SMEs are adequately stocked, especially considering the additional threat from the Omicron variant, they must be well stock and carry enough inventory needed to continue to thrive during these challenging times.”