According to our Business Rewired report, 2.6 million small business owners in the UK have genuine concerns about the future. They worry about broad business issues like late payments (54%), cyber-attacks (27%) and tax rates (44%). But they also worry about things like Brexit (44%), employee recruitment costs (19%) and increasing levels of productivity (31%) – which are more specific to our current climate.
It’s a challenging time. More than a third (37%) say this is the most turbulent period they have ever experienced. Plus many have pumped an average of £11,846.45 of their own money into their business..
But the good news is that it’s not all doom and gloom. There are great opportunities in store for those ready to embrace them. Artificial Intelligence (AI) advancements, hyper-connectivity and technology that could spell the end of late payments. Businesses of all sizes are also becoming more socially conscious, less reliant on email and computer screens. They are also more fluent in hiring staff with multiple jobs.
Here are some things we’re starting to see now, and can expect to see more of in the not-so-distant future.
AI: A force for good
AI is already impacting small businesses. According to leading business futurologist Gerd Leonhard, “Automation is reducing the need for humans to undertake routine tasks and the world of work is heading towards a dramatic reset. Everything we assume about work, jobs, training and education is being challenged by exponential scientific and technological progress”. He predicts that AI will change the 9-5 and could cut working hours by up to half. It will also kill the 30-day payment model, spelling the end of late payments.
According to the Business Rewired report, nearly half (43%) of small business owners prioritise their business’ purpose over its profits. Best-selling SME author, Sunday Times columnist and podcaster, Emma Gannon, believes that this will be true of nearly all small businesses, as they will become more purpose-driven, rather than process-driven. “If your employees want some flexibility, a meaningful new business project – or something beyond just monetary value – will keep them with the company for longer” she said.
Even in 2020, over a quarter (28%) of small business owners say they have been affected by bandwidth and internet connectivity issues. As more businesses move over to the cloud, having intermittent internet connectivity isn’t an option.
The good news is that the UK Government’s £40 million investment in 5G and higher speed internet access will help everyone get online a lot faster. For businesses, this means doing more business and doing it better.
The end of late payments
We already know that late payments are a big problem. According to Xero statistics, small businesses are owed an average of £23,360 in overdue invoices on any one day. The average small business owner can only survive for 12 weeks if they suffer a “bad” month or two from late payments.
The good news is that end-to-end digital transactions, cloud accounting and a change in the number of companies that individuals work for, will require the setup of a new type of payroll. The long and short of it is that payments will continue to get a lot quicker – which is welcome news for everybody.
Business owners are right to be cautious and concerned about what the future holds. But it’s also important to keep sight of the more positive changes that are happening in the market. Those that get on the front foot and invest in the latest technology will benefit from the advances quicker than anyone else.