Key trends and challenges for SMEs in 2024 – The Growth Hub is here to help
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It’s the start of a new year, so now is the perfect time to make some resolutions about how you are going to move forward with your business, now being the right time to inject some new direction, skills and money into your business to take it to the next level.
If you don’t act now, before you know it, you’ll quickly be back to doing things the way you’ve always done them and getting the same results. So to help you with your new year resolutions, we are offering a range of new services to help you make your business dreams a reality. So what better reason do you need to act now? With this range of support from the New Anglia Growth Hub, we will work by your side to make 2024 your year for positive change!
Our intensive programme of structured business support and grants is funded by our Local Authority partners and the UK Government’s Shared Prosperity Fund, available directly from the New Anglia Growth Hub.
Your focus in 2024 to ensure future success
There’s no doubt that parts of 2023 were challenging for small businesses. At the start of 2023 there were 5.5 million small businesses (with 0 to 49 employees), 99% of the total business population. SMEs account for 99.9% of the business population (5.6 million businesses). SMEs account for three-fifths of the employment and around half of turnover in the UK private sector.
According to the Department for International Trade (DIT), the UK Government’s commitment to supporting SMEs is evident in increased funding initiatives. In 2023, SMEs received £3.5 billion in grants and loans, with expectations of a further 10% increment in available funding for 2024.
Data from the UK Export Finance (UKEF) indicates a surge in SMEs exploring international markets, with a 30% increase in SMEs leveraging export support services. Furthermore, partnerships with European counterparts continue to thrive, with SMEs fostering alliances to navigate changing trade dynamics post-Brexit. Additionally, UKEF introduced enhanced financing to augment international trade and expand exporting opportunities for small businesses.
For small business in UK, it’s a safe bet that many business plans have been altered drastically over the past few years. The world of business is arguably more competitive than ever – making customer connection, acquisition and retention increasingly important. Even with challenges ahead, there’s a load of chances waiting, asking for smart moves and quick thinking from SMEs in 2024. Here are some of the predicted trends:
1. Opportunities using Generative AI
Driven by AI, business owners will be looking to boost their engagement through tools such as predictive analytics, and behavioural data to create messaging tailored to the individual. The 2024 Technology Insights Report by TechUK highlights a surge in SMEs adopting advanced technologies. Approximately 70% of SMEs plan to invest in cloud-based solutions, while over 60% are integrating AI-driven automation into their operations. Moreover, data from the British Business Bank confirms a notable uptick in SMEs utilising fintech services, with a 25% increase in loan applications through digital platforms.
Generative AI, a ground-breaking technology that automates the creation of content, is set to transform how SMEs approach marketing and product development. For instance, GPT-3, an advanced language generation AI developed by OpenAI, demonstrates the potential of this technology in creating human-like text (OpenAI). SMEs can harness generative AI to streamline content creation, from automated report generation to crafting marketing copy, enhancing efficiency while reducing operational costs. Also, investing in customer-centric technologies, such as AI chatbots or CRM systems, can significantly enhance the customer journey. These technologies provide seamless, responsive, and personalised experiences, leading to higher customer satisfaction and loyalty.
2. Skills-based hiring and growing importance of employer brand value
ONS data outlines persistent challenges faced by SMEs, including labour shortages exacerbated by a mismatch in skill requirements and available talent. A survey conducted by the Federation of Small Businesses (FSB) reports that 45% of SMEs struggled to hire skilled workers in 2023, hinting at potential continued challenges in talent acquisition.
As the working world continues to evolve and adapt to modern society, employers are changing their approach to the hiring process. As such, employers are prioritising experience and skills over more traditional methods of hiring, such as qualifications and degrees. Founders will consider investing more time into training existing staff as technology continues to shift and affect job roles. Where tasks such as data management, research and scheduling are now taken care of through automation, 2024 will see more time being put into developing soft skills such as empathy, problem solving and clear communication amongst staff. This is set to open up the labour market in 2024, breaking barriers for those who previously may not have been considered for a role due to a lack of qualifications.
The importance of ensuring worker satisfaction beyond adequate remuneration is also being recognized by SMEs. Personal growth and development are included here, as well as work-life balance, wellness, and intellectual challenge. The world of work has evolved rapidly over the last two years, and employers have had to constantly adapt to remain competitive. It has forced them to rethink HR fundamentals and overcome unexpected obstacles, including the effect of inflation on wages and hybrid workplaces. People are looking for authenticity and transparency, especially when it comes to choosing their employer. Companies that speak openly and honestly about their corporate culture, values and challenges are perceived as more credible and trustworthy. An authentic employer brand enables companies to attract the right applicants who fit well with their culture and values.
3. Environmental, social, governance/diversity, equity, and inclusion concerns
Social value in business refers to the impact a company has on society and the positive contributions it makes beyond generating profits. It involves taking into account the environmental, social, and economic effects of business operations. Understanding and embracing social value is becoming increasingly important for businesses in today’s socially-conscious world.
One crucial aspect of social value in business is the enhancement of overall societal well-being. Businesses direct their focus towards creating products and services that not only benefit customers but also have a positive impact on the wider community. This can be accomplished through the implementation of sustainable and ethical practices, providing fair wages and working conditions, as well as supporting local suppliers.
Research continues to show that consumers increasingly prefer companies with a solid commitment to reducing their environmental footprint. There are many drivers in embracing sustainability; protecting the company’s reputation, customer satisfaction, improving stakeholder relationships, responding to investor pressure or simply a sense of responsibility and concern..
A report by YouGov reveals that 65% of UK consumers prefer purchasing from businesses with strong environmental commitments, motivating SMEs to pivot towards sustainability-driven models. Even though it might not matter to some customers whether you are an environmentally friendly business or not, others might be actively turned away by your practices if you reject sustainability. SMEs should look for ways to reduce their carbon footprint, from sourcing locally to adopting green technologies – you have very little to lose in this endeavour and plenty to gain.
Incorporating social value into business strategies yields numerous benefits. It not only enhances the company’s reputation but also attracts socially conscious customers and investors, fostering employee satisfaction and motivation. By prioritising social value, businesses are more likely to build strong relationships with local communities and create long-term value for stakeholders.
4. Digital marketing continues to evolve rapidly
Competition for attention on social media and the internet will only increase in the coming years. Small businesses should prioritize a multi-channel approach to marketing in 2024 and beyond. Wide-scale social media strategies can work in tandem with direct mail, content marketing, and other forms of marketing that still have relevance in the modern age. As the marketing landscape evolves, staying adaptable and open to emerging trends will be key for small businesses to thrive.
Understanding the effectiveness of your marketing efforts is crucial for every business, regardless of its size or industry. According to a 2019 report, 46% of small business owners are unsure if their marketing strategies yield any results. If you find yourself in this category, it’s time to shift gears and start measuring your return on investment (ROI). ROI serves as a critical indicator of the profitability of your marketing campaigns. It provides quantifiable evidence of whether your marketing efforts translate into sales. Essentially, ROI helps you determine the financial impact of your marketing strategies on your company’s bottom line.
Your business’s visibility is crucial to attracting customers. Digital marketing enhances your brand’s online presence, making it easier for potential customers to find you. A well-crafted digital marketing strategy can significantly boost your website’s search engine ranking, making it more likely to appear in search results. This enhanced visibility translates into more website traffic and increased brand recognition.
One of the key benefits of a digital marketing strategy is the ability to laser-focus your marketing efforts. By harnessing data and analytics, you can precisely target your ideal customers. Customised content, tailored to the needs and preferences of your audience, not only engages them effectively but also cultivates brand loyalty. By crafting content that speaks directly to your potential customers you can enhance their connection with your brand. Personalised marketing will deliver what your customers need at the right time, on-time delivery, frictionless setup and installation, and efficient problem resolution. This is a crucial approach in markets where consumers expect businesses to understand their unique needs and provide customised solutions.
5. Increasing business resilience
Also key for 2024 is ensuring an organisation is protected from whatever threat is around the corner. That could mean cyber-attacks, economic downturns, environmental events, global pandemics, or the emergence of a disruptive new competitor. Building resilience is about taking what we’ve learned from companies that have survived and even thrived in turbulent times and using it to plan and prepare for what might happen tomorrow. The future is never certain, and building resilience to any threats that might emerge will be a key business trend in 2024.
For a growth-focused SME, lapses in cybersecurity can be catastrophic. Protection must be integral to every aspect of decision-making, from product development to supply chain management. Phishing, a deceptive practice where cybercriminals impersonate legitimate entities to extract sensitive information, has been a significant threat in the digital world. Over the years, phishing has evolved from simple email scams to sophisticated methods involving artificial intelligence (AI), social media and mobile platforms.
Understanding these trends is crucial, as staying ahead of these evolving tactics maintains cybersecurity. By keeping informed about the latest developments in phishing, individuals and organisations can better protect themselves against these ever-changing cyber threats.
In this era of disruption, reacting swiftly is critical. To increase your organisation’s speed, consider steps like streamlining decision-making processes, leveraging data to understand trends more quickly and putting in place policies to implement new ways of working—and even failing—faster. In general, companies that hesitate, dig in their heels or look the other way have the toughest time. Having a structure in place to allow you to act decisively and quickly will help you keep pace with changes as they come.
How the Growth Hub can help you plan for the future
What did you learn from 2023 and what do you plan to achieve in 2024? You may need to reflect on any skills gaps in your team, whether your growth plans for the new year could benefit from more hands on deck or if areas of the business might need to be restructured to improve efficiencies. A recent survey by Tree Business of 1,002 UK business leaders found that 33% of SMEs are prioritising investment in marketing capabilities this year, with 29% investing in staff training and development, 27% customer service, and 22% the adoption of AI and other digital technologies.
Running an SME isn’t easy, and your business may benefit from a trusted, independent adviser to help you boost your business. That’s what our new support programme is designed to do, and can help you to reassess your business plan, and develop strategies for tackling any of the challenges you face; be that upskilling your business, going digital or finding growth finance for future business investment. Our programme of support aims to increase your confidence, knowledge and skills, secure growth finance, improve your sales, marketing and growth strategies, and ultimately increase your turnover and profitability.
Interested? Contact us today and our business advisers will contact you to with more details of what’s on offer and how to get boosted!