More than four in five UK small business owners have made key changes to their business and services in order to prepare for the economic uncertainty in the months ahead, according to new research from Hitachi Capital Business Finance.
In a poll of 1,447, Hitachi explored what small businesses were doing nationally to adapt, specifically looking at how family-run enterprises and start-up firms were adapting.
The research found that family-run businesses were significantly more likely to focus on the physical workplace by adapting the layout of their work premises to comply with PHE guidelines than the average small business (29%).
Family business owners were also more likely than the national average to have: re-skilled and retrained their staff (25% versus 20% on average); introduced new competitive pricing or promotional offers for their clients (24% versus 19% on average); and simplified product lines/focus on areas of core strength (20% versus 17% nationally).
In contrast, bosses of tech start-ups took a different approach, being more focused on expansion. One in ten had pulled out of unprofitable overseas markets, with 14% switching work to countries where there were new business opportunities.
Other priority areas for tech start-ups included launching new products and services that were responsive to the current market (22%), as well as picking up business from bigger brands that were suffering (14%).
Nationally, Hitachi’s research also suggested that investing more heavily in digital capabilities and making adjustments to the workplace were the key considerations for the average small business.
Overall, 27% of small businesses said they were now spending more time talking to their existing clients through online platforms, with a quarter saying they were looking to sell more goods and services through online channels. In addition, 21% said they were investing more in digital marketing to reach new audiences.
One on four small business said they were busy adapting the layout of the workplace so that staff could come back to work quickly and safely, while a fifth focusing on re-skilling and re-training staff to help the business better focus on its new priorities.
Other steps taken by small businesses related to adapting their service offer and pricing to the new market conditions, such as: introducing new competitive pricing/promotional offers (19%); simplifying product lines/focusing on core strength (17%); reinventing their service offer to respond to what people actually need (16%); switching the focus to quality, and more premium services (15%); picking up business from big brands that are in trouble/contracting (13%); increasing work in overseas markets where there are exciting opportunities (12%); and pulling out of unprofitable overseas markets (9%).
Joanna Morris, head of marketing and insight at Hitachi Capital Business Finance, commented: “With businesses working at reduced capacity since the beginning of the outbreak, the majority of bosses have been forced to change many aspects of their business in order to stay afloat.
“What is striking from our research is the variance of approaches taken by quite different small businesses. They are drawn to the agility of the tech age, but it’s noteworthy that the most traditional of enterprises are adapting too – just in a different way.
“There is no right way, there is not really a typical or average small business any more. At Hitachi Capital we are interested in understanding how different small business groups react differently to common challenges, as this gives us the basis to ensure we can help more small business to secure growth in the uncertain months ahead.”