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The Business Year – 2016 in Review

Before embarking on a brand new year, we thought we’d take a look back at 2016.  How the year was for business, especially the small to medium businesses that form the backbone of the British economy.  With 5.5 million private enterprises here in the UK and 99.3% of those being categorised as small businesses, SMEs are vital to the country’s economy, employing more than 15 million people.  Their combined turnover was £1.8 trillion, a massive 47% of all private sector turnover in the UK.  The past year has seen sustained growth in the total business population, a trend which has been continuing since 2000.  Here at Access Credit Management, we’re committed to providing SMEs with a debt collection service that will benefit them and we regularly provide business and cash flow advice here in our News section.

 The most important development by far for business in 2016 was the Referendum on whether or not the UK should stay in the European Union.   Before the vote in June, business leaders were warning that a “No” vote would cause untold economic damage, leaving business owners in the UK concerned about their financial future.  Inward investment slowed down in the lead up to the Referendum but the vote for Brexit came as a shock to many people.  Since then, we’ve been left facing an uncertain future with nobody (including the government it seems) knowing exactly how things are likely to pan out over the next couple of years.  The ensuing change of government which saw Theresa May move into 10 Downing Street as the new Prime Minister created even more uncertainty but ministers have been rallying to reassure the population of the UK that all will go smoothly.

Brexit seems to be the biggest issue of 2016 (closely followed by the election of Donald Trump as the new US President) and this has resulted in a downturn in confidence levels when it comes to business in Britain.  Smaller businesses have been struggling at times to stay afloat, resulting in clouds on the horizon when we look to the future.   While Brexit is likely to bring risks, it will also provide opportunities for some and the strategies employed by the government in the upcoming negotiations with the EU must manage both the risks and the opportunities in order for the economy to start recovering. 

Most small business owners will admit that the cost of doing business has increased steadily over the past year due to a range of policy choices which created a cumulative effect.  The commencement of the National Living Wage resulted in an increase in labour costs just when the rollout of workplace pension auto enrolment began to impact smaller businesses.  This means that we start 2017 with a relatively weak medium term economic outlook before we even think about the prospect of inflation in the coming spring.  Smaller firms are likely to feel the pinch with the price of imports, supplies and products rising steadily. 

2017 is likely to be an interesting year for business here in the UK and we’ll be keeping our readers up to date with all the important developments, so keep checking back for more news on a regular basis.