Business founders and workers in London are more optimistic about their prospects for 2023 than last year, and many are now looking at opportunities to grow or start their business, according to a new study by Oracle NetSuite.
The study of more than 500 business founders and workers in London revealed that founders plan to counter the tough economic conditions by focusing on profitability and pricing, while 37 percent of the London workforce would like to start their own business this year.
London business founders and workers are optimistic about 2023
A year has made a big difference for London business founders and workers, and many are now looking at opportunities to grow or start their own business.
- 75 percent of London founders feel more optimistic about their business’ prospects for 2023 than they did for 2022. Forty-eight percent expect to grow their business this year, 45 percent expect things to stay the same, and 74 percent would encourage others to start a business now.
- London workers are also confident about the future. Seventy-nine percent of full-time workers plan to start their own business, and 67 percent plan to do so in the next two years.
- The top reasons workers in London want to start their own business in 2023 are to be their own boss (52 percent), gain more control over their lives (51 percent), become wealthier (35 percent) and challenge themselves (34 percent).
- Many workers are already on their entrepreneurial journey and have a ‘side hustle’. Thirty-four percent of workers in London have a separate source of income to their main job that they plan on turning into a full-time venture.
Taking steps to counter the impact of inflation, rising energy costs, and a recession
Despite their optimism, London business founders know it’s a tough environment and many are trying to counter challenges by focusing on profitability and pricing.
- The top challenges facing London founders are rising costs/inflation (50 percent), increasing energy costs (51 percent), and the knock-on effects of a recession (47 percent).
- Despite being among the largest challenges facing London founders, concerns around inflation have dropped by 35 percent and worries about a recession have dropped by 33 percent compared to last year.
- To address these challenges, London founders have shifted their priorities and will be focused on improving profitability (42 percent), managing costs (37 percent), and growing revenue (32 percent) in 2023.
- To improve profitability, 33 percent of London founders plan to increase the price of products and services by up to 10 percent this year, with a further 18 percent noting they plan to increase prices by up to 20 percent. Only 15 percent of founders said they will not raise prices in 2023.
- Workers in London are also mindful of the challenging environment, and the biggest concerns for prospective founders are not having a predictable income (53 percent), funding (51 percent), and the possibility of failure (44 percent).
Cloud is the way forward as London business founders tackle a multitude of challenges
Almost all London business founders that are using cloud technology are seeing the benefits as they navigate a challenging economic environment.
- 81 percent of London founders are using cloud technology to navigate economic challenges and 93 percent of them are seeing the benefits.
- The top three benefits they are experiencing from cloud technology are being able to run their business remotely (30 percent), being able to conduct accurate financial reporting (28 percent), and being able to automate processes like payroll and invoicing (27 percent).
- Workers who may be looking to start their own business also recognise the importance of technology. In fact, 91 percent believe technology will play a key role in the success of a new business.
Nicky Tozer, EMEA SVP at Oracle NetSuite said, “It’s encouraging to see so many business founders and workers looking positively at the year ahead.
“Our study suggests that founders are adapting to the persistent risk posed by inflation and recession by doubling down on productivity, the use of cloud technology, and meeting pricing pressures head on. The city’s entrepreneurial spirit is shining brightly, as evidenced by the quarter of workers currently bringing in additional sources of income to their day job.”
Jack Lewis, Founder and CEO of Sowvital, a London-based Oracle NetSuite customer, launched the business after spotting an opportunity during the pandemic to help people care for house plants.
“As founder of a business in a relatively niche area, we see huge opportunity and reason for optimism in 2023. People are applying the pandemic-related mantra of ‘self-care’ and home improvements to more areas of their lives, including house plants.
“The idea has proven fruitful, but now it’s about execution and scaling. Key to supporting that is the system we use to run our business. We adopted NetSuite less than a year into launching so that we could make effective use of data to make quick decisions that will help our business grow. In this environment, execution is everything. Make sure you have the right partners.”
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