It’s been another eventful year in the UK, with political and economic uncertainty dominating. And this promises to continue despite the conclusive result of the recent General Election.
But, as the following will show you, Brexit is not the only thing to make headlines in the world of small businesses. Here are our picks for the top SME news stories of 2019:
Skills in short supply
The lack of appropriate skills was a persistent theme during 2019. In July, coworking company The Brew by rent24 revealed that eight out of 10 SMEs struggle to find new recruits with adequate skills.
This lack of skills was found to be likely to impact the total revenue of a typical small business by £145,000 through 2020, rising to £318,000 in the next five years, according to recruitment company Robert Half.
Older talent was one area that seemed to be slipping through the net for SMEs. Most feel the recruitment process discriminates against older workers, with the same research finding that 66 per cent of SME business owners view the recruitment process as favouring younger workers.
There was, however, evidence that SMEs were taking action to attract and retain workers, with more than half (53 per cent) planning to increase the benefits they offer staff over the next two years.
Late payments continue to cause problems
While figures varied, the issue of larger companies failing to pay their smaller suppliers in a timely manner continued to dog small businesses.
According to figures released by payment firm Pay UK in November, UK small businesses are owed £23.4 billion in late payments, a figure that rose by £10.4 billion in the past year alone. The research also shows the proportion of SMEs experiencing overdue payments has hit 54 per cent, the highest level since 2015.
Research from Xero and PayPal found that the average UK SME owed its suppliers £8,811 in overdue bills in December 2018, equivalent to £50 billion of debt across the small-business economy. With, on average, 48 per cent of invoices issued by small businesses in any given month being paid late, this results in 26 per cent of small-business owners struggling to pay their own suppliers on time. Other research found businesses pay their smallest suppliers 30 days later than their bigger suppliers.
One of the knock-on effects of these late payments is that half of small contractor owners have been forced to stop their own wages due to payment delays by bigger firms. Engineering services trade bodies ECA and BESA found three-quarters of business owners had made sacrifices forced on them by late payment. These included reducing their own salary (37 per cent) and cancelling company training activity (23 per cent). Nearly one in ten employers were also forced to pay their own staff late.
Running a small business is demanding
It seems running a small business is proving a challenge for many company owners. Small-business platform Xero found many factors are putting an increasing strain on the mental health of SME owners.
The study found that 83 per cent have experienced stress in the past six months, with 17 per cent admitting they are ‘highly stressed’. The negative effects include sleepless nights, drinking more alcohol, and arguments at home.
Another piece of research found that small-business owners spend 17 full days a year worrying about business-related issues outside work. In addition, 51 per cent acknowledge they have trouble switching off from work, with 41 per cent saying they often get pulled into business matters when trying to unplug.
Small-business owners are also taking less time off, with more than a third of getting by on three weeks holiday or less a year.
Cybersecurity an increasing issue
Cybercriminals increasingly turned their attentions to SMEs in 2019. A report from cyber insurance firm Gallagher found that 1.4 million British SMEs were affected by a cyberattack or significant security incident in 2018. The alerts, according to Gallagher, cost the UK economy £8.8 billion overall, with the average attack costing nearly £6,500 to resolve.
In addition, security vendor CybSafe found that 43 per cent of the 250 SME IT decision-makers surveyed experienced a phishing attempt through impersonation of staff, with two-thirds of those attacks succeeding.
Despite this, CybSafe found only 47 per cent of respondents claimed to already have a cybersecurity training and awareness programme in place. Clearly, small businesses will need to take security more seriously in 2020.
There’s no denying that Brexit once again dominated the agenda for small businesses. It impacted business confidence, with the Federation of Small Businesses (FSB) calling for radical interventions to be brought forward, including a major reduction in business rates bills for small firms.
Research indicated uncertainty over Brexit has cost smaller firms over £1 million each in lost revenue and turnover in the past three years. Almost half of those polled said they do not believe the government has done enough to help businesses prepare for Brexit.
However, there were some positives, with evidence suggesting that the growth and funding ambitions of SMEs grew stronger in 2019. SMEs are also bullish on 2020; asset-based lender Independent Growth Finance (IGF) found, according to a statement released in October 2019, that 73 per cent of small businesses expect to see their revenues climb in the next 12 months, compared to 69 per cent at the start of the year.