Small Businesses to Dominate the Business Landscape in 2020
The number of UK start-ups is set to rise by 20 per cent in the next decade, a report by Bibby Financial Services has predicted.
Bibby’s report 2020 Vision – the Future of Business has forecast a “seismic shift” as entrepreneurs and the self-employed take over the business landscape.
Key trends include the shrinking of workplaces in favour of virtual offices, while larger businesses will struggle to absorb the 5 million new workers expected by 2020, the report suggested. Instead, more people will choose to set up their own business, often operating outside of traditional trading hours and premises as lines between home and work become “more blurred”.
Technology will continue to have a huge impact on business, and small firms resisting advances in e-communications, m-commerce including mobile payment systems and social media will be “left behind, unable to compete”.
The report also predicted a shift away from banks as small firms, faced with the rising cost of borrowing and more restrictive conditions, increasingly seek to fund themselves with sales revenue or savings.
“If anything, the past few years have shown that UK businesses have the ability to adapt to face challenges head-on and evolve to respond to new opportunities.”
said Edward Rimmer, chief executive of Bibby Financial Services.
“The way businesses use and access funding will certainly change in the coming years.”
Forum of Private Business spokesman Phil McCabe said small firms and micro-businesses were already tapping into informal sources of credit, such as borrowing from friends or using their own savings:
“We’ve seen how small businesses have become increasingly alienated from the banks because of steep lending costs, so this would appear to support the forecast.”
More people were choosing to set up on their own, he added, typically as a means of gaining control over their working lives.
“Business ownership is increasingly becoming a more viable career choice, especially among young people fresh out of university,” said McCabe. “With job security disappearing fast and uncertainty over pensions, people are more willing to take risks – there is undoubtedly a greater appetite for self-employment.”