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2021 was a year of challenge and change for small businesses. Established SMEs struggled to adapt to the ever-changing coronavirus situation, not to mention Brexit’s impact on export and import regulations. So, what does 2022 have in store for SMEs?

New and emerging trends include the evolution of entrepreneurship, creativity, e-commerce, online shopping, hybrid/remote working, customer service, work/life balance and increased concern for the environment. Let’s take a closer look at the key trends shaping the SME landscape this year: 

The evolution of entrepreneurship & creativity

Despite the pandemic placing a financial strain on small businesses, it also provided an opportunity for innovation. With many people furloughed or unemployed, some found time to act on their passions and business ideas, resulting in the creation of many new small businesses. 

Data from Companies House reveals a high volume of new startups: ‘340,534 businesses were registered in the UK between January and June 2021, an increase of 32% from 257,243 over the same time period in 2019’. 

With new ideas and creativity flourishing, new small businesses ‘redefined what it means to be an entrepreneur, adding more diversity to the small business space’, according to entrepreneur.com.

The evolution of entrepreneurship is to set to be a key trend for 2022

Shifting towards e-commerce and online shopping

With small businesses forced to temporarily or permanently close their stores during the pandemic, many shifted their focus to online trading. The change from bricks and mortar-based retail to an enhanced digital presence has since led many to realise the benefits and opportunities of bringing their business online. 

Entrepreneur states that maintaining both an in-person and online shopping experience leads to more opportunities for potential customers to discover your business: 

‘Figuring out how to balance and maintain both in-person and digital experiences, and infusing the two experiences together will ensure small businesses are reaching the largest possible customer base, not restricting them based on their geographical footprint, while also providing the convenience that local customers desire’. 

Online shopping is increasing, as shown by statistics from Oberlo: 

‘In 2021, there were 900 million more digital buyers than there were in 2020—a 4.4 percent year-over-year increase’. 

We will definitely be seeing more e-commerce in 2022 and mobile purchases are predicted to increase this year by a whopping 68% (Forbes). The shift towards e-commerce and online shopping is only getting stronger.

Mobile purchases are predicted to increase this year by a whopping 68% (Forbes)

Hybrid / remote working

Hybrid working has become an established way of working in the UK. While many small business owners have struggled to adapt to these new working conditions, others have thrived. Remote working can have many benefits such as convenience and flexibility, no commute to work and saving office costs. However, some small business owners have felt isolated and have struggled to find a work/life balance with the hybrid working model.  

Hybrid and remote working options are expected to remain in place within most companies. A study conducted by Google in 2021 found ‘over 75% of survey respondents expect hybrid work to become a standard practice within their organization within the next three years’. 

With the rise of the Omicron variant, and possibly variants to come, we are likely to see a lot of hybrid working again this year. Hybrid work is an ideal model for handling these unexpected issues, such as COVID-19 variants, or even a bad flu season. When one of these issues arises, it’s easy for employees to switch back to working remotely since they are already set up for that.

Customer service

A focus on efficient customer experience is set to be a trend this year. With disruptions becoming part of daily life during the pandemic, customers generally showed patience and understanding. However, as we are now slowly coming back to normality, customers again want and expect efficient customer service. 

‘95% of customers say that customer service is important to their choice of and loyalty to a brand’. (Source: Microsoft)

‘80% of customers say the experience a company provides is as important as its products and services’. (Source: Salesforce) 

Increasingly personalised communication is also a new trend in marketing. Customers want to feel more engaged and to make personal connections with businesses they buy from. There has been an increase in businesses using messaging to add a more personalised touch to their customer service.

Entrepreneur explains how customers want a personalised approach when companies communicate with them: ‘In this digital era, 75% of adults globally say they want to communicate with businesses via messaging, in the same way they communicate with friends and family’.

Coherent customer service is crucial when customers are deciding what brand to trust

Work/life balance

With the rise of remote/hybrid working, many employees have found the work/life balance difficult as now their new office is at home. It is easy to get caught up in a cycle where your work and home life start to blend into one another. Glassdoor surveyed 2,017 full time employees, finding:

‘52% of UK staff do not have a good work-life balance’. 

However, the survey also found many employees want to improve their situation:

‘Two-thirds (66%) of respondents intend to make changes to improve their current work-life balance and are looking for employers to offer a solution, while 67% said that what they want from a balance between work and home has changed since the pandemic began’. 

We expect that in 2022 employees will prioritise a healthy work/life balance. Employees are starting to adapt and settle into this new way of working which is becoming a norm. Many European countries have already started to bring in regulations in order to improve work/life balance. In November 2021, Portugal brought in a rule that employees can’t be contacted by their work colleagues outside their contracted work hours (Source: AP News). 

Will 2022 be the year the UK finds better ways to deal with the work/life balance?

More environmentally conscious

Small businesses are at the forefront of the green economy. SME businesses make up 99.9% of the UK business population. Put those stats together and you can see the trend.

In 2019, a global study stated that 35% would choose to buy eco-friendly products; in 2021 that percentage rose to 50%. We expect that percentage to increase again this year, and as a result we’ll be seeing more customers and businesses making environmentally conscious choices. 

According to The Federation of Small Businesses’ Accelerating Progress Report, ‘56% of small businesses believe the world is facing a climate crisis. However, only 36% have a plan in place, and just 30% have acted on their plan’. 

There are many benefits to your business going green, including: 

• Reducing your energy consumption keeps costs down
• Improves your brand image 
• Creates a healthier work environment 
• Reduces traffic congestion by hybrid/remote working 
• Investors and financial opportunities 
• Attracts a wider audience
• Impacts employee morale

Want to know how we help UK small businesses grow with peer-to-peer loans at rebuildingsociety.com? Find out more here: https://www.rebuildingsociety.com/ifisa/

Check out our latest blog posts on the rebuildingsociety.com platform: 

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