Find out why!
Uncertainty is heavy in the headlines and weighing on the minds of many small business owners. In fact, it is an almost universal fear, with 96 per cent of small business owners across the UK admitting that they are worried about disruption. Yet, very few have a plan in place to address the inevitable upheaval their businesses will face, despite their concern.
Eyes wide shut
Uncertainty over government policy and regulation tops the worry list. In light of ongoing Brexit negotiations SME owner’s fears over government regulation are warranted and timely. Businesses are biding their time following the same EU rules while awaiting new ones in the coming months and years. Discussions are circling around a potentially declining talent pool, the loss of a single market, and the opportunity to forge new trade agreements. All of which puts the future in doubt.
However, no matter how significant Brexit might be to a business, it’s not the only challenge they now face. In fact, it has distracted UK business owners and taken their eye off a form of disruption that is far more fast moving and imminently relevant. Industry disruption by its very nature has the ability to threaten the tried and trusted business models of the past and drastically impact the SMEs status quo.
The type of disruption that makes headlines the most (after Brexit) – that of radical new business models: Deliveroo, Purplebricks and the like – features comparatively low in business owners’ fears, with just a quarter (25 per cent) citing this as a concern. But this is not representative of the current business landscape. Take Airbnb for example. In less than ten years they have totally reinvented the tourism market. Yet, despite the obvious issues, only two per cent of real estate companies have a plan in place to meet those challenges.
Transportation, another industry that has been facing significant disruption, also remains unprepared. Less than a fifth (19 per cent) of SME owners in this sector state they have an established long term plan to curb the impact of disruption, and this is the sector that is the most prepared. In the midst of this, Uber and Lyft are threatening the very existence of the taxi industry. Not to mention the downstream effect they have on public transportation alternatives. Uber is not stopping there, already innovating to disrupt the food delivery industry by introducing UberEATS in select areas.
Rise of the machines
Surprisingly, given that technology is at the heart of many of the most influential disruptive business models, the fear over new technologies disrupting markets is only shared by a small minority of business owners – down at less than a quarter (22 per cent). Ironically, technology firms themselves are the least prepared, with just one in fifty (two per cent) technology sector SMEs having a plan for disruption.
In this ever-changing industry it is difficult to figure out what to care about, what is a quick fad and what will change the way we live and work for years to come. Take artificial intelligence (AI), as this technology becomes freely available to more and more people it represents an increasingly disruptive force that businesses should be very familiar with. Additionally, the conversation around the Internet of Things (IoT) continues to develop and highlight significant question marks around the future of myriad industrial workflows, and that’s just for starters.
Catch me if you can
Despite the anxiety and uncertainty that inevitably surrounds disruption in the market, there are some positive things to be said. The intimidating nature of disruption also tends to make business owners more determined to protect what they have built, but that doesn’t always translate into a drive to keep abreast of the advancing changes. This is the first thing that needs to change. Ultimately, when disruption is viewed as a motivator rather than a cause of paralysis it can enhance the ambition of SME owners, in fact over a third (35 per cent) say that it actually makes them more determined.
While most SME owners admit that they are concerned about disruption, there are few that plan as if they believe it will never hit their industry or their business. Until it does. The temptation remains, stick to what we know and bury our heads in the sand, ignoring the change that is going on around us. Luckily, even when leaders don’t know what is to come, there are steps to be taken to fortify their livelihoods against disruption.
Business owners can stay one move ahead by learning about the way disruption has impacted other businesses and sectors. Teaming up with advisers, peers and business leaders to share knowledge, gather intel and get consultancy will help ensure that SMEs feel informed and confident in the decisions they make. Ultimately, by committing to put some time and attention on their own innovation, business owners can pre-empt some of the disruption they are destined to face while ensuring that whatever happens isn’t a surprise.