The majority of SME owners in the transport and logistics sector report that the rules of doing business have changed, but are they ready for the challenges that lie ahead? Research by accountancy firm, Menzies LLP, reveals that business owners in the sector are aware of the challenges that lie ahead but some could be working too hard or failing to seek the mentoring and specialist support needed to succeed in turbulent times.
Based on a survey of 1,003 SME owners in the UK, which included 30 operating in the transport and logistics sector, the majority report that the rules of doing business have changed significantly in the past year and Brexit and other uncertainties mean they are likely to keep changing.
The top three ‘rule changes’ noted by SME owners in the transport and logistics sector include improved availability of software and apps to streamline business management and accounting systems; competitor activity has intensified and important business decisions have become more data driven.
Mark Perrin, partner and head of transport and logistics at accountancy firm, Menzies LLP, said: “Small and medium-sized businesses have a much closer understanding than multinationals of how the rules of doing business have changed. This awareness combined with their size and agility has enabled many of them to adjust to the uncertain market conditions. The research shows that SMEs in the transport and logistics industry are acutely aware of the need to react to changes in market demand and make business decisions more quickly. For many, the ability to lay their hands on reliable and up-to-date data in a format that is tailored to the operational needs of the business is now critical.”
With more changes on the agenda, SMEs in the transport and logistics sector know they could be facing diverse risks in the year ahead. The top three risk factors identified were cash flow difficulties; geopolitical uncertainty and its effect on trading activity and a lack of resources, in particular, a lack of senior management time. For some, this lack of time could be making it difficult to drive improvements and greater focus on outsourced services, which are tailored to the needs of the business, could help.
SME ownrs in the transport and logistics industry are more likely than those in any other sector to be happy with their work life balance. However, on closer questioning, the picture is more ambiguous. 30% of them admitted that they sometimes find it difficult to switch off and enjoy their leisure time and about a quarter (27%) described their work life balance as ‘completely out of control’.
Perrin said: “SMEs in the sector seem broadly happy with their work life balance but there are signs that some may be struggling to find time to relax away from the business. Whilst staying focused is important, the most successful entrepreneurs tend to be those with a more rounded approach to life, who understand what they are doing it for and plan their futures on this basis. In uncertain times, SME owners need to do more, not less, of this type of forward thinking and keep their plans under review.”
There are other indications that SMEs in the sector may be feeling stretched. The majority of SMEs in the sector say they lack support and feel they are running their business alone, on average, more than three times per week.
“The research shows that some SMEs in the sector feel isolated. Better signposting to mentoring and other business support services may be required,” added Perrin.
Findings from the research showed:
- 83% of SME owners in the transport and logistics sector say the rules of doing business have changed significantly in the past year (more than the cross-industry average of 75%)
- The top three ‘rule changes’ are access to software; competitor activity has intensified and important business decisions have become more data driven.
- Their biggest challenges in the year ahead are controlling costs and cashflow forecasting and staying up to date with shifting regulations
- 30% admitted they sometimes find it difficult to switch off properly and a quarter (27%) described their work life balance as ‘completely out of control’
- Most say they lack support and feel they are running their business alone, on average, more than three times per week