If you’re part of an SME in the UK, give yourself a pat on the back. Businesses in this bracket are currently contributing £196bn to the UK economy1. And that’s set to grow to £217bn - up 11% - by 20201. That’s the good news. The not-so-positive news is that many SMEs are still facing financial distress. According to the latest Red Flag Alert report2, 276,518 businesses were experiencing financial distress in Q4 of 20162. Of those, 90% were SMEs2.
But it’s not all doom and gloom. There are success stories. For some of the fastest-growing businesses in the UK, keys to growth and success might include:
- Placing emphasis on the shopping experience
- Having a niche USP (unique selling point)
- Making a move into physical retailing as well as online, and vice versa
- Understanding the customer on a deep level
- Making digital more physical and physical more digital
- Ensuring speed to market and value for money
- Going for international expansion
- Keeping prices low.
1. Think about other channels and how they could work for youIf you’re a pure-play business – i.e. you only sell online, not in store – think about how you can complement that channel with another. We know that the majority of millennials are willing to spend money on live experiences rather than material things3, so maybe it’s time to start thinking about how you can offer retail experiences. This could be as simple and cheap as a social chat with one of your product designers or a behind-the-scenes video of your business. Or it could be a more significant investment in the form of a pop-up shop or stall at an event that gets you physically in front of shoppers.
Equally, if you’re a bricks and mortar retailer only, consider selling online, or at least having an online brand presence. It’s not as onerous as it might seem – here’s a guide to selling online that could help. If you want to start smaller, building up an audience on one social media channel doesn’t have to be a big task and it can give you great insight into customer wants, needs and expectations.
2. Brush up on social media and influencer marketing, quicklyDid you know that 92% of consumers trust an influencer more than an ad or traditional celebrity endorsement4? And with social media being probably the easiest place to find and see the impact of influencers, it’s here that you can identify the different types of influencer, how they work and which one (or more) might be a good fit for your target consumer. One good thing to note is that the number of followers an influencer has on a social media channel doesn’t necessarily mean they’ll be effective or ineffective as an influencer for your potential customers. It’s about picking based on relevance. For example, if you’re a luxury gadgets retailer, you may have a large following of people who can’t afford your products. Your influencer should uphold the brand image and appeal to those people who can afford them; this is more important than the number of followers they have.
3. Start taking card paymentsResearch shows that UK SMEs who don’t accept card payments are missing out, collectively, on almost £8.8bn5. Shocking, right? And perhaps even more surprising is that almost 49% of small businesses in the UK don’t yet take card payments; so we can’t even comfort ourselves with the thought that it’s the significant minority missing out. Taking card payments could open up a whole world of extra income for your business, ultimately because you’ll be giving customers the option of how they’d like to pay. Have a browse of some payment solutions for help on how to start accepting card payments.
4. Invest in technology to improve efficiencyPicking the right technology to invest in can be critical to successful growth for all businesses, including SMEs. Technology can help improve and speed up communication between staff, and with customers, which in turn means more efficient working and higher levels of customer care. In fact, 57% of SMEs said improving internal efficiencies is the greatest benefit of investing in digital technology6. It can enable efficient mobile working, which in turn can improve productivity and employee satisfaction levels. And it can help link together different channels for shoppers with payment solutions that allow customers to pay where, when and how they want. Check out this guide to business success 7 for more.
5. Put mobile firstOh, and putting mobile first might be a good idea too. After all, in December 2016 sales via smartphones rose 47% year-on-year, compared with a decrease of 3% in tablet sales8.
2. http://www.telegraph.co.uk/business/2017/01/30/spike-number-uk-firms-suffering-financial-distress-smes-struggle/ (Jan 2017)
3. http://hillsbalfour.com/blog/millennials-driving-the-experience-economy/ (April 2017)
4. https://www.forbes.com/sites/deborahweinswig/2016/10/05/influencers-are-the-new-brands/#56218a037919 (Oct 2016)
5. https://www.barclaycard.co.uk/business/news-and-insights/smes-missing-out-on-8-8bn-by-not-taking-cards (July/August 2016)
6. http://smallbusiness.co.uk/uk-smes-investing-tech-growth-2535098/ (Nov 2016)
7. https://www.barclaycard.co.uk/business/news-and-insights/barclaycards-guide-to-business-success Feb 2017
8. http://uk.businessinsider.com/mobile-sales-drive-unexpected-uk-e-commerce-growth-2017-1 (Jan 2017)