Business development · 7 January 2016

Ringing the changes: How micro firms can adapt and grow in 2016

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What changes will you make to your business in 2016?

As most entrepreneurs and micro business owners will attest to, it’s important to be dynamic in business and embrace change when necessary. As the community of small businesses in the UK grows increasingly quickly, and with the business landscape constantly shifting, it’s important for small firms to stay flexible.

So said policy convener at the Federation of Small Businesses (FSB) Andy Wilcox in his 2016 New Year’s message to the small business community. “Smart businesses know that change is where it’s at. It’s where the opportunities lie,” he stated.

“If you can’t change, or you can’t adapt to rapidly changing circumstances, you are going to be left behind and so is your business. 2016 is going to be a year of decisions, debate and change.”

So, if you’re a micro business owner looking to make the most of the year ahead, in what ways should you be willing to adapt in order to grow, and what key things should you be on the lookout for? Business Advice has some New Year’s resolution ideas that could see your firm get the jump-start it needs.

Embrace digital

In a report published last year, the FSB looked at digital disruption, finding that the most successful small businesses put adjusting to advancements in technology at the forefront of plans to grow. We’ve urged our members not to end up like the video shop or film developer,” said Wilcox.

“Instead, small firms should harness the opportunities unlocked by technology and put digital at the centre of their 2016 plans for growth.”

The government has also encouraged startups to maintain a digital perspective. Last month, digital economy minister Ed Vaizy emphasised the increasingly strong links between the digital realm and business in the UK. “Every part of the UK economy and our lives is being digitised – from how we shop and entertain ourselves to the way we travel to work and manage our health,” he said in a statement.

The UK’s so-called “digital revolution” has also seen the country become one of most attractive places in the world for tech startups. The UK is fast-becoming a leading digital economy, boosted by roughly £145bn a year from digital technology.

With the average British person now spending around £1,500 a year via online purchases, it doesn’t matter whether you’re a tech startup on Silicon Roundabout or a one-man-band running a business from your living room – it’s time to get digitally savvy to maximise your chances of growth in 2016.

Understand the changing legislation

This year will likely see the landscape for small businesses change drastically throughout the UK. Last year brought in a new UK government, and 2016 will see major elections being held in Scotland, Wales, Northern Ireland and the City of London.

In addition, local council elections and new police commissioners will put in place new lawmakers and enforcers that will work to re-set the agenda for small businesses.

The chancellor’s promise to turn Britain into a “higher wage, lower tax, and lower welfare society” will require the small business community to become a key driver of economic growth and stability. Measures like the new National Living Wage will be introduced, as will changes to dividend taxation and the workplace pension – all of which will affect how small businesses operate.

These legislative changes represent opportunities for the country’s micro firms, but owners need to understand them thoroughly and be willing and able to adapt.

Consider new markets and products

The best way to maximise the potential of success for your micro business in 2016 may be to think about widening your customer base and growing your offering. Exporting is an increasingly attractive option to small business, and bodies like UK Trade and Investment (UKTI) are on hand to guide owners looking to spread their business’s wings.

Although growing a business in this way often requires money, there will be more and more ways for small firms to get funded in the year ahead. Thorough research into the funding options available to your venture and a willingness to explore alternative financing routes could guarantee a profitable year.

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ABOUT THE EXPERT

Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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