As we begin 2025 with a somewhat stunted start, businesses must navigate a complex landscape of operational challenges - but there is promise amongst the pandemonium.
With the UK economy unexpectedly shrinking in Q4 of 2024 and inflation surging at its fastest pace in months, business owners are likely concerned about what the year ahead holds - especially with a higher national minimum wage and employer National Insurance Contributions imminent. Clearly, prioritising planning and focusing on improving operational efficiency will be critical choices in 2025 - if done correctly, that is.
A strong revenue growth forecast is vital for effective year-ahead planning. The recent stalling of the UK economy is hardly the positive shift business owners were hoping for as it lacks much-needed stability - but the wider economy itself isn’t an automatic fix for those with a fear of floundering.
Forecasting isn’t merely guesswork; by leveraging historical data from previous years' sales, you have the opportunity to observe insights into patterns that can accurately inform revenue projections. This facilitates better planning and informed decision-making - and gives you a relatively accurate approximation of what you can expect.
Service-oriented firms, in particular, should prepare for the potential spike in last-minute client work or project deadlines that often occur as the year kick-starts. Accurately predicting these trends allows businesses to allocate resources efficiently and capitalise on increased demand - without overextending themselves.
Whatever sector you operate in, seasonal shifts invariably lead to significant fluctuations in expenses, whether through holiday bonuses, year-end incentives, or overtime payments.
Ensuring payroll systems are error-proof and up-to-date is a must as a single mistake can cascade into chaos for employee morale and operational stability. This is especially true when you realise that 91% of UK companies admit to making payroll errors on a monthly basis, according to a recent survey by HR Magazine.
In fact, the average UK business loses £150,000 each year due to entirely avoidable payroll errors - and almost half of employees (49%) would look for a new job after just two payroll errors impacting their salary. In this instance, it’s best to pay more attention to payroll processes to increase staff retention and lower unnecessary expenses.
Similarly, the start of a new year is also a perfect time to invest in your future. Reviewing capital expenditures, such as updated technology or infrastructure improvements, can fortify business resilience for the twelve months ahead. These proactive investments often deliver the double bonus of improved efficiency and a tax advantage.
Many businesses can face a frenzy of requests from customers and clients looking for work to be started in the new year. Proactively managing these timelines ensures smooth operations and happy customers.
Maintaining strong supplier relationships can also be a lifeline. Taking the time to negotiate flexible payment terms or secure delivery schedules that align with your needs can actively help businesses to prevent log jams in their supply chain, which can cripple productivity at the worst possible moment.
While we all seek to expand and enhance our offering, it’s important that businesses balance their strategies for growth against the need to maintain immediate operational priorities. In this vein, I’d also recommend that you speak to an expert business adviser for tailored support to guide you through these critical steps and ensure a strong, successful start to 2025.
