Small businesses have had a year filled with highs and lows, but with 2023 been and gone, many will be looking ahead to fresh opportunities in 2024.
To help small businesses navigate an ever-changing economic landscape, small business insurance provider, Simply Business, has revealed five key topics SMEs should consider heading into the New Year.
The general election
The general election is set to take place during 2024, so it is going to be a campaigning year for all UK political parties. This will mean uncertainty over policies moving forward while businesses face anxiety about rising costs and energy bills.
Simply Business surveyed small business owners in November 2023 to find out what they think the government should do to help.
Two thirds (66%) would like to see support with tax incentives and breaks, while a third (34%) said they wanted increased funding to support energy payments. Small businesses will need to keep an eye out for each party’s election manifesto to determine what they will mean for small businesses.
Tax changes in 2024
The Chancellor announced a range of tax changes as part of his Autumn Budget, which will give small businesses a much-needed boost at the start of their year. Class 2 National Insurance contributions will be abolished from April 2024, while the Class 4 National Insurance contribution rate is being reduced from nine to eight per cent for the 2024-25 tax year.
Importantly, side hustle platforms (such as Etsy, Airbnb, and Deliveroo) have to report freelancers’ earnings to HMRC from 1 January 2024. As a result, it is essential that small businesses are aware of what the changes mean for them.
The continued rise of side hustles
The UK saw a surge in the number of ‘side hustle’ businesses during the COVID-19 pandemic, and the trend for using multiple streams of income has not slowed since then. According to our SME Insights Report 2023, two in five (40%) of established businesses started out as a side hustle. With this track record of success, it is likely that more entrepreneurs will continue to take the leap in 2024.
Simply Business data has explored some of the popular side hustles that have seen growth in 2023 and could well continue into 2024.
Sustainability and shopping second hand will remain important
Consumers are increasingly looking to shop with businesses that can demonstrate sustainable practices, and it is expected to remain a focus in 2024. Over three quarters (78%) of SMEs say that sustainability is at the forefront of their business strategy, but their efforts are being hampered by the cost associated with implementing “green” working methods.
Shopping second hand is another trend to keep an eye on in 2024. Whether that’s selling on clothing apps like Vinted or opening your own online shop for repairs and custom-made items, it’s certainly growing in popularity.
Growing need for childminders
In March 2023, the government announced its plans to expand access to free childcare support for families in England. From September 2024, working families can access up to 15 hours of free childcare for children aged nine to 23 months, set to increase to 30 hours from September 2025.
Currently, the childcare industry is struggling to meet demand which seems to be creating a gap in the market. Analysis of policy data has found that the number of childminders in the UK has grown by 70% in 2023 compared to the previous year.** This suggests that people are already looking at how to fill this gap in the market and this is likely to continue to increase into 2024.
Alan Thomas, UK CEO at Simply Business, said, “The New Year brings with it fresh opportunities, and SME owners will be keen to see what 2024 has in store for them.
“Small businesses are the lifeblood of our local communities, and with over five million of them in the UK, together they contribute trillions of pounds to the economy. They are quite simply the backbone of the economy, and need our support more than ever.”
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