17.9 million Brits – or one in three – want to start their own business in 2023, but with the UK about to formally enter a recession, the road to success has potential pitfalls.
Given the current economic climate making good business decisions at the outset has never been so important, but new research shows that nearly half (48%) of small business owners who started their business in the past two years admit rushing into important decisions, with 81% of these worrying afterwards if they’ve made the right one.
To inform entrepreneurs hoping to start up a successful business in the current economic climate, Intuit QuickBooks polled entrepreneurs who started a business during the UK recession in 2007–2009, about the key decisions that determined how well their businesses performed.
Sharing the burden is key to small business survival
Looking back, the top most important decisions made by those who started a business in 2007-2009 were getting the pricing of products and services right (34%), their approach to finding and retaining customers (27%) and deciding to run their business full time rather than as a side hustle (24%).
A reluctance to ask for help could be a contributing factor to them facing challenges. In terms of the decisions they regret, nearly a third (31%) of those who set up a business during the last recession wish they had asked for more help and not tried to do so much on their own. This reflects the current landscape: only 29% of current small/medium business owners surveyed always seek advice from others before making important decisions.
A quarter of business owners also say they wish they had done more research into the marketplace and customer base before starting their business, and 23% said they should have paid closer attention to their cashflow. Seeking professional advice can support business owners in making the right financial decisions to increase their chances of success. An accountant, for example, can offer advice beyond traditional bookkeeping, such as cash flow and tax compliance advisory.
Jolawn Victor, Vice President and UK Country Manager at Intuit QuickBooks says: “It is a common perception that running a small business is a solo venture, particularly at the outset, and small business owners are putting too much pressure on themselves to make decisions quickly and independently. Insights from those with experience of being a business owner during the last recession suggest it’s particularly important to seek support when making big decisions in a challenging economic climate.
“Experts such as accountants are also an important partner in making good business decisions, providing everything from financial management to broader strategic business advice, contributing to small business owners’ peace of mind. Another tool entrepreneurs can lean on to make better decisions is digital software. The data and insights provided give an immediate picture of your business’ future trajectory, flagging what’s working well and what needs to evolve.”
Challenging times breed robust business owners
While 59% of those who set up during the recession say they have experienced stress and anxiety, there is good news for those looking to take the plunge this year: 8 in 10 agree the experience of opening during a recession made them a better business owner, with 45% saying it increasing their confidence in themselves as entrepreneurs and the same proportion saying they learnt lots of valuable lessons about running a successful business.
Stephen Andersen and Andrew Allen, Co-founders of Papillon Living say “When we established Papillon Living in the heights of the last recession, there was practically no-one offering us encouragement or support – we set up a business against all the odds and in doing so, learnt some extremely valuable lessons.”
“For entrepreneurs setting up a business in the current economic crisis, we’d recommend doing your homework on your offering. Make sure to check out the competition and see how you can distinguish yourself, especially if it’s a crowded market. Secondly, quality will always shine through, be that in the merchandise or the service you offer. We had no idea retail would be so challenging and demanding but if you stick with it, it feels amazing to offer top quality to your local community and support your customers.”
“Keep a tight control on costs. Cash truly is ‘king’ – it’s the lifeline for your business and your livelihood. Finally, be passionate, love what you do and don’t lose sight of why you went into business in the first place. Being your own boss is its own reward and has way more upsides than downsides, plus you get to do something you really love, and that’s not something that everyone in work experiences!”
Charlotte Alloway, Founder at Bodies Built for Life said, “Launching my personal training business this year is a very exciting for me, and I’m glad I made the decision to plough ahead despite the challenging landscape in the UK.
“One of the most important decisions I made was to grow my team through hiring another talented trainer, who can effectively help me share the client load and a professional web designer to make my business more accessible worldwide.
“Having an accountant I trust to help me run the financial side of the business also gives me peace of mind. Because of these choices, I am able to focus on running the business itself without burning out or becoming overwhelmed. It’s amazing what can be achieved when you seek help from others to complement your own offering.”