By Amanda Salt, Vice President, Small & Medium Enterprises, UK Card Services at American Express
SMEs have faced unprecedented change and disruption in recent years. From the economic repercussions of the pandemic to rising costs and ongoing cost of living pressures, SMEs and those that lead them have experienced uncertain times.
Against this challenging backdrop, dynamic entrepreneurs are looking for opportunities to set themselves up for sustained success. Based on recent American Express research of SMEs, here are three key areas business leaders should consider in the year ahead as they prioritise growth:
Travelling for business? Build in ‘bleisure’
Business travel plays a key role in increasing revenue and profitability – that’s according to recent research by American Express that reveals 85% of businesses agree with this statement.1 SMEs and those that run them recognise the benefits associated with business travel, but their approach should look a little different to previous years due to shifting traveller priorities.
Our research suggests over four in 10 (42%) of business travellers prefer when they can blend business travel with leisure time. The combination of the two, known as ‘bleisure’, should be a focus area for businesses to ensure their employees are getting the most value out of their trips. Examples of ‘bleisure’ include adding some extra days to a business trip to relax or bringing family and friends on work trips for little to no extra cost. By giving this a greater emphasis, businesses can ensure they are making trips more enjoyable and worthwhile, leading to increased productivity and, ultimately, higher returns for the business.
Trade internationally? Take a more proactive approach to payments
Despite wider economic challenges, half of UK SMEs currently operating internationally plan to expand into new global markets this year.2 The appeal of international trade clearly hasn’t faded, despite recent fluctuation in the value of Sterling inevitably causing some disruption. What’s interesting is that, despite the volatility, almost half (49%) of organisations either don’t have a proactive strategy in place to manage exchange rate fluctuation or aren’t sure if they do.
Taking a proactive approach to international payments can help to reduce risk and therefore maximise growth and returns when expanding overseas. By working with an experienced partner with the international knowledge and expertise to manage FX fluctuations, SMEs can get more from their transactions and navigate future uncertainty, wherever they decide to build their business.
Review and invest in payments technology
A perennial priority for businesses is to do things more efficiently with technology seen as the key facilitator in doing so. Some 30% of UK businesses that expect to spend more on technology are doing so in a bid to improve productivity, Amex research from last year found.3 A further 30% cite a desire to improve the quality of their products and services as the main motivation for increased spending on technology.
Payments technology is an important area to consider as part of the discussion, as it can help support healthy cashflow. Automation can streamline account payable/receivable processes and provide more real-time visibility into revenue and outgoings, which can help SMEs optimise their cashflow and navigate bumpy economic conditions. Automation limits the need for manual input freeing up employees to focus more of their time on bringing in new business and providing a winning customer experience.
These are just three opportunities for businesses to help set themselves up for success in 2023 and beyond. Of course, your specific business strategy and financial circumstances will determine the focus on these areas – and it’s important to remember businesses shouldn’t take a one-size-fits-all approach. The year ahead will come with challenges, but many SMEs have shown themselves to be incredibly resilient and will continue to do so.
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1 American Express and Opinium surveyed 500 business travellers and 500 business travel decision makers from SMEs with 1-249 employees and large businesses with over 250 employees in the UK. Fieldwork was undertaken between 25-29 July 2022.
2 American Express and Opinium surveyed 500 senior decision makers in SMEs that operate internationally. Fieldwork was undertaken between 11-18 October 2022.
3 American Express, the Centre for Economics and Business Research and Opinium surveyed 502 decision makers across businesses of all sizes, with responsibility over at least three categories of expenditure in the UK. Fieldwork was undertaken between 26 April – 9 May 2022.
