Each year, Sage asks thousands of small business leaders from around the world to share their challenges, winning attitudes, and aspirational insights.
We then publish what we find in our annual Small Business, Big Opportunity report, to help business owners like you prepare for the future.
In this article, we explore learnings from the latest report, and offer advice on keeping your business thriving over the next year covering:
Report results 2023
Our survey of almost 12,000 small and mid-sized business (SMB) leaders, including 2,000 in the UK, revealed that British businesses are more optimistic about their prospects than this time last year.
This is great news, given the many challenges of 2022, where rising costs and pressures on revenue and cash flow impacted profitability.
Globally, 84% of business decision-makers feel confident about their company’s future success, compared to 69% in 2022.
Small business, big opportunity 2023
Most believe the challenges of the current economic climate will pass, and feel they’ll be in a positive financial position later in 2023.
68% of SMBs surveyed globally think that the cost of business crisis is going to significantly improve in 2023.
Small business, big opportunity 2023
Over a fifth (22%) of respondents expect a decrease in their costs, while 46% of UK SMBs expect an increase in revenue, with close to half (49%) expecting to increase their workforce.
The main driver of this confidence is technology, and its potential to improve businesses beyond survival.
The results show that 92% plan to maintain or increase their tech investment, and UK SMBs are more likely to adopt emerging technologies than any other country, such as 5G (28%), artificial intelligence (AI) (16%), and the metaverse (16%) over the next three years.
The solutions they adopt will mainly be focused on saving time, improving productivity, and adaptability—all of which help them be more resilient for any future disruption.
Most businesses have already learnt the value of technology, with many stating that past investments are paying off and playing a central role in improving productivity.
Globally, the percentage of SMBs satisfied with their productivity increased from 68% in 2022 to 78% in 2023, and SMBs named increased efficiency or productivity as the foremost driver of business confidence.
Small business, big opportunity 2023
So, the more productive a business can be, the more confident its leaders feel.
And tech investments appear to be the best way to operate more efficiently, which has been crucial during the cost of business crisis.
In the video below, watch as Steve Hare, Sage’s CEO, sits down with two of Sage’s valued UK customers to discuss the reality of what it means to be a small and mid-sized business (SMB) in 2023 – the highs, the lows, as well as the reasons for optimism looking forward.
Steve is joined by Autumn Rabbitts, founder of Alnwick based Plumb and Rabbitts Cake Studio and Sweet Solstice café, and Andrew Thompson, the CEO of Cleveland Group.
How to beat today’s challenges
Though UK small businesses are optimistic about the future, they still face some tough challenges. After all, tech may be able to help them be more productive, but bringing in effective solutions has barriers of its own.
Respondents said a lack of budget and not knowing which solutions are right for their business are the top blockers.
They also recognise that tech alone is not the answer.
They need great people too, and getting access to them is proving difficult.
In fact, over a third of UK SMBs (39%) say they’re not satisfied with their ability to recruit talent.
Here are a few ways your business can overcome these three big challenges.
1. How to choose the right tech
There are so many software providers and solutions that knowing where to start can be paralysing.
But back-office areas such as accounting, payroll, HR, and customer relationship management (CRM) all have the potential to transform your business when made more efficient.
So, where do you start?
Here’s what to consider when looking for solutions in these areas:
Embrace the cloud
Choose a cloud-based solution, as this will help you automate many tasks. It’ll also keep your data in a single location, so your whole team is always working from the same information.
In many cases, cloud software is more affordable, easy to set up and integrate, and can even be paid for on a subscription basis, which helps with cash flow.
It’s automatically kept up to date, can be accessed from any device, and includes built-in security.
Eliminate admin
When considering tech capabilities, prioritise those that help you reduce or remove admin, which is a drain on your team’s time, energy, and attention.
Those that automate processes will make your organisation more productive, as they reduce time demand, human error, and duplicate effort.
Automating admin also has a positive impact on your people, allowing them to focus more on work they enjoy, which adds value to the business.
Whether it’s financial reporting, generating invoices, or reconciling transactions, leave as much work to the tech as possible.
Think about customer support
Go beyond solution capabilities and look at the support you’ll receive from the provider.
Will they be difficult to reach when you need them? Do they offer anything beyond access to the solution?
Will you need training to be able to use it?
To get an idea of how well the provider will look after you, read reviews from other users and ask those in your network about their experiences.
Remember, you’re focusing more on the provider here than the specific solution.
Choose tech that can scale
If the tech you implement achieves what you’re hoping, your business can get bigger. But as it grows and evolves, so will your needs.
Consider if the new solution can be appropriately scaled, or if you’d need to switch to a different one later down the line.
Each has different implications, including cost, disruption to operations, and potential down time.
2. How to find budget for your tech investment
Getting budget holders to set aside money for the tech you want can be tricky. Even more so during a tough economic climate.
Once you know the specific solution, you’ll need to build a business case that proves its return on investment and shows how it can achieve your business-priority goals.
To do this, you need to be clear on what those goals are, and make sure your tech solution aligns with them. Then you should show what business value will be achieved within a specific timeframe.
A few other things you need to prove are:
- How the tech will integrate with your IT infrastructure.
- How the solution will share data and meet security requirements.
- What the long-term cost will be, not just the upfront investment.
You also want to back up your business case with unbiased feedback and reviews, case studies, empirical data, and any trusted independent research.
This will help to prove the tech can achieve what you’re aiming for.
If you’re the business owner and don’t need a budget holder’s approval, you should still build this business case before making any investment decision.
This will help you when setting a budget across the business more widely, and give you an idea of how much is available to invest in tech.
If the business case is strong enough, you might decide to allocate more than you originally planned.
3. How to hire the right employees
Though using technology is the main driver for improving productivity, getting the most out of your solution relies on people.
With the top talent armed with the right tools, there’s no limit to what your business can achieve.
The pandemic transformed many people’s priorities and expectations around work, making recruitment tough. You can no longer rely on a good salary to attract and retain the best employees.
An increase in job vacancies and the possibility of hybrid and remote work is offering candidates more opportunities, so they’re able to be choosy.
Here are a few ways to approach recruitment to get the best possible people on your team:
Use digital advertising
Most potential candidates spend their time and attention online. This is where they are looking, so this is where you need to advertise.
LinkedIn is the obvious choice for social media, so start there. But don’t neglect other channels too, such as industry-specific job boards.
Much like your marketing efforts, you need to grab attention. So, experiment with your messaging and imagery, and test to find what works and what doesn’t.
For any candidates you speak to, ask where they look for job opportunities to further inform where to focus your advertising.
Offer career development
Today’s top talent are looking for opportunities to learn and grow. In both your advertising and interview process, make it clear what career development you offer.
Structured reviews, goal setting, training, and clear career paths are all attractive for those with big ambitions.
Speed up your recruitment process
If your recruitment process takes too long, there’s more chance that the top candidates will find another opportunity elsewhere.
More than two interview stages would be considered slow, not to mention the time it takes you to communicate and give feedback.
Cloud HR tech can help you speed up the process, which puts you ahead of the competition in terms of landing the right people quickly.
Look beyond experience
Limiting your ideal candidate profile to experience will cause you to miss out on some great hires.
Some other things to consider are transferrable skills, attitude, values, sector knowledge, and future ambitions.
This is where a great employee value proposition comes in.
Get this right, and you’ll start to attract the right people, rather those that simply have experience.
Final thoughts
Despite the challenges of 2022, UK SMBs are bucking the trend, unleashing unprecedented optimism looking to the next 12 months.
They believe the current economic climate will pass, and that they’ll be in a stronger financial position by the end of the year.
As businesses continue investing in tech, they are looking for ways to overcome the three biggest barriers faced right now:
- Choosing the right solutions
- Finding ways to fund them
- Recruiting the best people to use them.
By following the tips above, you too can take advantage of technology, improve the productivity of your business, and make the most of today’s opportunities.
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Small Business, Big Opportunity 2023
In this annual report, discover the views from 12,000 small and medium business leaders as they highlight the challenges their companies face and the opportunities they're looking to embrace.
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