The majority of SME retailers and wholesalers report that the rules of doing business have changed, but are they ready for the challenges that lie ahead? Research by accountancy firm, Menzies LLP, reveals that while business owners are ready, some could be working too hard or failing to seek the mentoring and specialist support needed to succeed in turbulent times.
Based on a survey of 1,003 SME owners in the UK, which included 222 in the retail and wholesale sector, the majority report that the rules of doing business have changed significantly in the past year and uncertainties mean they are likely to keep changing.
The top three ‘rule changes’ noted by SMEs in the sector include the burden of regulation is shifting (as the country prepares for Brexit); uncertain times are bringing more near-term opportunities and competitor activity has intensified creating a need to stay one step ahead.
Roberto Lobue, partner and head of retail and wholesale at accountancy firm, Menzies LLP, said: “Small and medium-sized businesses have a much closer understanding than multinationals of how the rules of doing business have changed. This awareness combined with their size and agility has enabled many of them to adjust to the uncertain market conditions. The research shows that SME retailers and wholesalers are acutely aware of the need to react to changes in market demand and make business decisions more quickly. For many, the ability to lay their hands on reliable and up-to-date data in a format that is tailored to the operational needs of the business is now critical.”
With more changes on the agenda, SMEs retailers and wholesalers know they could be facing diverse risks in the year ahead. The top four risk factors they identified were cash flow difficulties; breaks in supply; the potential impact of geopolitical uncertainty on trading activity and a general lack of resources – in particular, a lack of senior management time.
The majority of SMEs in the sector are happy with their work life balance. However, on closer questioning, the picture is more ambiguous. 41% admitted they sometimes find it difficult to switch off properly during their leisure time and a fifth (19%) described their work life balance as ‘completely out of control’.
Lobue said: “SMEs in the sector seem broadly happy with their work life balance but there are signs that some may be struggling to find time to relax away from the business. Whilst staying focused is important, the most successful entrepreneurs tend to be those with a more rounded approach to life who understand what they are doing it for and plan their futures on this basis. In uncertain times, SME owners need to do more, not less, of this type of forward thinking and keep their plans under review.”
There are other indications that SME retailers and wholesalers may be feeling stretched. The majority of SMEs in the sector say they lack support and feel they are running their business alone, on average, more than twice per week.
“The research shows that some SMEs in the sector feel isolated. Better signposting to mentoring and other business support services may be required,” added Lobue.