Small UK firms unveil plans to cut costs in 2017
The majority of small businesses intend to cut back in 2017, with rising costs, economic uncertainty and financial concerns among the main reasons why, new research has revealed.
According to Liberis, 58% of SMEs have prioritised cost cutting for after the turn of the year, with owners deeming it to be more important than staff training or development.
Other perceived challenges to business include Brexit, rising operational costs and the election of Donald Trump as US President.
Retail tops the list of sectors looking to reduce costs, accounting for 21% of the 58% that said they intend to make it their main priority for 2017.
Compare that with the automotive sector, where the overriding target is to develop staff skills in order to remain competitive.
Smaller SMEs with up to 49 staff are most likely to reduce costs, with larger firms more likely to focus on skills and development.
Of the respondents who see Brexit as the biggest business challenge, 61% were at least 45 years old and 84% were male.
For businesses with between one and ten employees, 86% said that competition was the biggest threat to their longevity.
If the competition cannot be overcome, firms could see sales drop and may ultimately be forced into insolvency if revenue streams dry up.
Other solutions may exist in these instances too, so it is important for a business to assess its available options before making any decisions.
Alternatively, undergoing an independent business review may reveal some issues and a strategy for combating them.
The survey also revealed information relating to how SME owners view their businesses, as 28% said they want to have a better work-life balance in 2017.
Of the individuals that said this, 24% were Millennials – aged 25 to 34 – while a quarter were based in the hospitality sector.
By Phil Smith