Go-getting owner-managed businesses have a confident outlook, reports the latest Moore Stephens annual business survey
The latest Moore Stephens annual business survey has found a cautious optimism among Owner Managed Businesses (OMBs) in the UK, with the majority expecting turnover and net profitability to increase this year. Three-quarters (77%) are confident about the general outlook (up seven percentage points from last year) while two-thirds (66%) expect 2016 to be better than 2015.
However, many OMBs have concerns about the risks they face – risks often beyond their control, being determined by Government policy and economic conditions. Moore Stephens Partner and OMB specialist Geoff Norman explains: ‘OMBs are most concerned about competitive and economic risks in 2016, but skills shortages are also a big worry.’ More than half (53%) are concerned about domestic competition, while 27% see international competition as a risk. Just over half (52%) view the strength of the UK economy as a risk and 33% have concerns about the strength of the global economy. 45% said that employee skills shortages were a risk to their business.
The good news is that OMBs are implementing strategies designed to mitigate these threats and support future growth. ‘Previous surveys have highlighted OMBs’ commitment to innovation and investment in their businesses,’ says Geoff ‘and this message comes through strongly again in this year’s results.’ Staff training is the top priority for OMBs with 85% saying they are planning to invest here. Two-thirds (67%) say they are likely to invest in technology, while 66% intend to launch new products or services, and 55% expect to introduce new production techniques.
15 ways to build a successful business
1. Address skills shortages by taking an innovative approach to recruitment, developing relationships with local schools, colleges and universities.
2. Nurture your talent and invest in training and development.
3. Consider whether tax-efficient long-term incentive plans could help you retain key employees.
4. Focus on cash generation – by generating cash you can seize opportunities and invest in your business, without having to rely on external funders.
5. If you do seek external finance, shop around and consider all the funding routes available, from asset-based lenders to peer-to-peer and crowdfunding platforms.
6. Target quality customers and build strong relationships with them – these customers will support the resilience and growth of your business.
7. Review your supply chain and consider whether opportunities exist for closer working relationships.
8. Make capital expenditure count: don’t led by tax reliefs or incentives but focus on what will increase efficiency, sales, service quality, etc.
9. Invest wisely in technology – cloud-based systems make new technology more affordable and widely-accessible than ever.
10. Examine your marketing spend: should you be applying it in different ways, perhaps experimenting with digital marketing?
11. Even if you are growing, keep a tight control on costs to maintain your margins.
12. If organic growth is slow, consider acquiring another business – a competitor, supplier or customer.
13. Be opportunistic and look for ways to diversify your business, e.g. by increasing overseas sales – but plan carefully before trying to enter foreign markets and take professional advice.
14. Be prepared to change your business strategy if it no longer works – a great strength of OMBs is their ability to make rapid decisions and respond fast to changing market conditions.
15. Don’t forget succession planning – it can take years to groom an upcoming management team or address internal issues that would put off an external buyer.
A full copy of the survey report can be found at www.moore stephens.co.uk
For more information, please call Geoff Norman on 01733 397300 or