What a year for the UK! With all eyes on Britain for the Queen’s Diamond Jubilee in June, followed by the kick off of the London 2012 Olympic and Paralympic Games on 27th July, 2012 was touted as a year to remember. Beyond the morale boost the country was promised, politicians also pledged a real economic reward for Britain’s small and medium enterprises this year.
But has 2012 really lived up to its hype? Judging by recent figures released by the government, there has certainly been some improvement, with the economy seeing a growth figure of 1%. Many have attributed the modest increase to this year’s ‘one-off’ events. Although these factors may have played a role in economic and business growth, I believe those SMEs which have flourished this year have done so for reasons beyond just circumstance.
So what has truly made the difference between those businesses that have succeeded, and those that have slowed over the course of 2012? According to a study by Santander, there are certain characteristics that are common across successful small enterprises. Predictably, ambition, experience and access to finance were cited as key factors in SME success – but expanding international markets was also listed in the findings.
This issue is something that I predict will be a crucial consideration for businesses in the coming year. More and more businesses are considering expanding into new geographic markets as a top business priority for the next twelve months. 2012 has provided a brilliant platform on which businesses can understand different markets, as tourism levels have rocketed throughout the course of the year, bringing with it new customers and expectations.
With the government trying to reduce the tax burden associated with international transfer pricing rules – businesses have real reason to feel positive that this could allow them to expand more easily overseas from a tax point of view. Clearly businesses are recognising the benefits of expanding into new markets (especially high growth markets such as China and Brazil), making this a trend to monitor closely in the over the course of the next 12 months.
This international outlook is indicative of the wider recognition amongst SMEs that new techniques are necessary to make their business proposition stand out from the rest. Next year, this needs to be at the heart of business strategy; whether it’s about expanding into new markets, or thinking about how best to engage your customers – taking an innovative approach is vital in an increasingly competitive market.
It will be the difference between seeing your company grow, plateau or sink.
John Antunes is director of SME & channels at SAP UK & Ireland