The UK is currently facing a cost-of-living crisis with inflation now at a 40-year high. Business owners have had a tough few years. They dealt with the Covid-19 pandemic, the Ukraine-Russian war and are now facing staggering costs due to inflation. With rising challenges, business owners are now taking extra measures to prepare ahead.
A study by the Oracle NetSuite found that 91 percent of UK SME founders have focused on developing new skills since starting their business. The two top skills businesses have focused on developing the most were marketing and communication (49 percent) and finance and accounting processes (45 percent).
The majority of SMEs are wary about the impact rising costs could have on their businesses, according to the survey. 88 percent of SME founders are concerned about the business impact of rising inflation and 83 percent were worried about a recession happening. Many business owners have already taken steps to address this rising uncertainty in the markets, fearing it could affect their profitability in the oncoming months. 76 percent of businesses have changed their business plan in the last two years. In addition, 65 percent of SME founders say knowing the financial health of their business right now is critical, and 45 percent say their main goal is improving profitability this year.
More than two-thirds of SMEs have already adopted cloud technology to gain a competitive edge in an uncertain economic landscape. 87 percent of SME founders using cloud technologies said they are seeing the benefits to it, while only 15 percent of cloud users still rely on manual processes to run their business, compared to 63 percent that don’t use cloud technology. Using cloud technology appears to be helping businesses prosper, according to the survey. 75 percent of business owners said they grew their business in 2021, compared to 47 percent of those not using cloud technology.
Adam Taylor, the co-founder of PetShop.co.uk, an Oracle NetSuite customer, started his business in the 2010 financial crisis after being made redundant. He explained how adapting new skills helped him saved his business: “Accounting and finance skills are key for any founder; you need to understand your gross margins and profitability. If we had understood our financials and gross profit better in the early days, we would have perhaps diversified earlier on into higher margin products.
“We always see with any disruption there is also a huge opportunity as others will be nervous and scaling back their investment. As a small business owner, we’ve recognised the value of our cloud-based systems to outmanoeuvre other companies and gain a competitive edge, despite the tricky economic landscape.”
Nicky Tozer, EMEA Senior Vice President at Oracle NetSuite said: “The economic whirlwind of the past two years has emphasised the importance of resiliency and adaptability and founders that are taking advantage of the cloud say they are achieving greater levels of growth and business confidence compared to founders of SMBs that don’t. Cloud technology has levelled the playing field for entrepreneurial businesses, giving them the ability to access real-time, accurate business and financial information and keep business efficient and on track.”