Although the fortunes of individual business sectors have varied in recent years, in general terms recent developments include the following:
- the increasing dominance of major national concerns which operate from many different branches. This is occurring in many business sectors and threatens the smaller independent firm
- clients increasingly demanding good value for money
- pressure on fee levels as a result of increasing competition
- the high standards being set by the major firms influencing the standards found among smaller independents
- internet-based and mobile services becoming strong competitors in some sectors
- increased regulation of many professional and service-based sectors
The economy was strong throughout much of the 2000s, but saw a sharp downturn towards the end of the decade and remained very weak during the early 2010s. Inevitably this had a negative effect on most types of business including those operating in the service sector, and some - for example those linked to the housing market and the construction economy - experienced real difficulties. Things started to improve in 2013 and the economy continued to strengthen during 2014 and into 2015, before stalling again towards the end of the year.
The economy continued weak throughout 2016 and 2017 due to the uncertainty following the Brexit vote in June 2016. The uncertainty continued throughout the Brexit negotiations, leading to low growth in 2018. The fall in the value of the pound following the Brexit vote led to an increase in the cost of imported items and rising inflation. As a result, both businesses and consumers have restricted their spending, particularly on big ticket items. No change is expected for the rest of 2018 or 2019, with growth predicted to be sluggish for the foreseeable future.
Small well-focused and well-run businesses offering specialist services and maintaining high quality standards should always have a good chance of success. However, the business landscape has become very competitive. You will have to decide whether:
- demand will be high enough in your area to support your proposed business
- your local economy is healthy - if your region has been unlucky enough to suffer from many business failures and factory closures recently your client base will be very price-sensitive
- you will be able to compete against any other similar businesses in your area
Bear in mind that if you provide your services outside the UK your business will benefit from the fall in the value of the pound as this will make your fees more competitive on the international market.
Keeping up to date with developments
Joining a trade association or professional body is an excellent way of staying up to date with developments in your business sector. Most sectors are well represented by different trade associations and professional bodies, many of which produce specialist journals containing material of interest to all those operating in that sector. Some have comprehensive websites containing a wealth of helpful information.
The Federation of Small Businesses (FSB) represents the interests of all small enterprises in the UK and offers a variety of member benefits. It produces First Voice, a journal which helps business people to keep up with issues that affect them. You can find out more about the FSB and the services and support they provide to their members on their website.
You might also find it helpful to join your local Chamber of Commerce. The British Chambers of Commerce website contains links to the websites of Chambers of Commerce throughout the UK.
Trade shows and exhibitions
You can get a lot of useful information by visiting a trade show, conference or exhibition for your type of business. The Exhibitions UK website includes details of trade shows that may be of interest to you.