2016 could be a year for growth for northern SMEs
A surge of investment for the Northern Powerhouse is likely to help drive SME growth in the north of England exponentially in 2016, according to software company Citrix.
As local authorities will be receiving income from business rates, councils are set to control over £13bn in extra tax revenues and £26bn in total business rate revenues, which Citric claims will go a long way towards redeveloping infrastructure in the area.
In addition, it is hoped that the access to new funds can improve broadband access to the area to enable SMEs in the area to take advantage of technology such as videoconferencing and other collaborative tools. This will provide opportunities for remote working and cuts back on the need for extensive travel.
SMEs report a strong Christmas period
Following the British Retail Consortium’s (BRC) report that Christmas was a disappointing time for UK retailers, point-of-sale software provider Vend conducted its own study with SME retailers and found that they made 24% more sales during Christmas in 2015/16 than in the previous year.
Much like the BRC report, the data also reveals that discounted sales volumes are significantly higher in December pre-Christmas than during the sale-period afterwards, indicating that January Sales are dying.
Key findings include:
• Sales over the whole Christmas period (Black Friday - second weekend of January) increased by 24% in 2015 compared to 2014
• Sales from Boxing Day and into the first two weeks of January were 41% lower than pre-Christmas sales (in 2014, this was 34%)
• The number of discounts on offer were just 5% higher post-Christmas (In 2014, discounted sales were 158% higher after Christmas)
• 23rd December was the top Christmas spending day.
Economy is the biggest risk to business
The economy has been named as the largest challenge facing UK companies this year, according to a new Business Census report of business leaders’ expectations for the year ahead.
The survey of 1,000 businesses carried out by business data website Company Check revealed that almost a third (32%) expect the economy to pose the biggest risk to their company during 2016.
While the issues of recruitment and finance, 2015’s biggest headaches are expected to ease this year, the number identifying the economy as their main challenge for 2016 has grown by a third compared to last year. Concerns over political uncertainty have also taken priority for many, with a 40% rise in the number declaring this as their main concern; up from 11 to 16%.
Alastair Campbell, founder of Company Check and author of the report, said: “It’s unsurprising that economic and political uncertainties are on the rise, with the impending EU referendum, growing security concerns and possible interest rate rises all playing a part. Results like this highlight the strength of feeling among business owners looking for decisive leadership from our politicians to improve business confidence.”
Exchange rate could be rocked by EU uncertainty
The growth and profitability of UK SMEs trading internationally could be derailed by exchange rate volatility ahead of the UKs referendum on its EU membership, according to the latest research by currency experts World First.
Currency confusion is also leaving many businesses dangerously exposed to this year’s likely currency volatility due to a lack of preparedness and a knowledge gap.
The survey of more than 1,000 senior decision makers at UK-based SMEs making cross-border payments found that despite 75% fearing that currency volatility from the EU referendum will impact their business, almost half (47%) are failing to take any notice of foreign exchange markets and over a third (35%) believe that having a currency strategy is not important.
The research also revealed the extent to which UK SMEs remain dangerously exposed to currency fluctuations with 45% admitting they have been caught out by a sudden movement in exchange rates and 26% having been severely impacted by market volatility.
World First chief economist Jeremy Cook said: “2015 was one of the most unpredictable years in currency market history and there is little reason to expect change in 2016. With the EU Referendum hanging like an economic Sword of Damocles, there is an enormous degree of uncertainty and concern in markets and therefore it’s crucial that any business operating internationally has a clear strategy for managing their currency exposure.”