Small Businesses Trends We Saw in 2023

Implements, methods, and facts are constantly evolving. Staying in tune with the current state of small businesses can be challenging, especially in these dynamic times, meaning some sections aren’t worth your time. This guide will streamline the process with key statistics and insights, placing the spotlight on the retail sector, finance, tech industries, and employee retention. It will also shake things up with a new section dedicated to the legal fortifications every business needs in today’s landscape.

Identifying Trends and Patterns in the Small Business World

Small businesses are at the heart of the UK’s economy. Although the past five years have seen significant challenges, such as Brexit, general elections, and a global pandemic, small businesses in the UK (with 250 or fewer employees) still make up over 99.9% of the business population. Their contribution is crucial to the wellbeing of the national economy.

Despite a slight decline in recent years, with about 5.5 million small businesses in 2023 compared to 5.9 million in 2020, the small business community remains robust. However, inflation is a growing concern – 91% of midsize company leaders said their businesses are facing challenges due to inflation. The industries that have weathered the disruption well and are witnessing growth include wholesale and trade, finance and insurance, and real estate.

However, small businesses aren’t without their obstacles. About 56% of UK SMEs sought external finance in the last three years. The government or local government grants were the most popular form of financial support sought in 2021, highlighting financial constraints as a significant barrier for small businesses.

Furthermore, some sectors took a heavier hit from COVID-19. For example, the hospitality sector (54%) and the arts and recreation industries (41%) experienced the largest falls in revenue post-COVID. Similarly, Brexit has led to trade complications for many businesses, with delayed or obstructed cross-border trade in Europe.

Key Statistics:

• Almost 20% of new UK businesses reportedly failed during their first year.
• UK SMEs are responsible for 61% of employment in the private sector, contributing a turnover of £2.3 trillion.
• One significant industry seeing growth is the retail industry, employing the largest number of people and making up 18% of the UK’s workforce.

Take a look at a sector-specific guide, like the Retail industry on Genie AI for more detailed insights.

The Legal Foundations of Business

Contract drafting and interpretation form the backbone of business activity, ensuring smooth legal operations. Whether issuing or responding to contracts, it’s essential to have a solid legal foundation. Entrepreneurs should familiarize themselves with AI-powered legal tools like Genie AI’s SuperDrafter, which streamlines the contract drafting and negotiation process and enhances business dealings’ legal foundations.

Implementing the right legal structures can considerably fortify your business’s resilience in increasingly uncertain times. It reduces potential legal risks, ensures regulatory compliance, and standardizes your dealings with partners, customers, and suppliers. Optimizing for legal considerations is critical to both safeguard your operations and drive your competitive advantage.

Drawing Conclusions & Making Moves

Despite the numerous challenges, the small business landscape in the UK remains resilient. Although certain sectors faced more significant strain than others, golden opportunities remain and new ones are emerging. Industries such as finance, insurance, and retail are growing, presenting potentially lucrative spaces for entrepreneurs.

As small businesses gear up to navigate the future, the focus has now shifted towards strengthening legal operations. This strategic shift improves overall resilience while managing risk more effectively. Genie AI’s Legal Assistant readily meets this need, facilitating smarter drafting, reviewing, negotiating, and signing of legal agreements.

Join a growing community of businesses investing in solid legal foundations. Enjoy the confidence born from having AI on your side, providing interactive insights, and guiding each step. Signup to Genie AI, and let’s get started.

‍