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The Rules of Doing Business Have Changed, Say SMEs In The Hospitality & Leisure Sector

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  • 73% of SME owners in the hospitality & leisure sector say the rules of doing business have changed significantly in the past year
  • The top three ‘rule changes’ are competitor activity has intensified; important business decisions have become more data driven and the burden of regulation is shifting ahead of Brexit
  • The top four risk factors identified are cash flow difficulties; geopolitical uncertainty; breaks in supply and a general lack of resources, in particular, senior management time.
  •  48% admitted they sometimes find it difficult to switch off properly and a quarter (24%) described their work life balance as ‘completely out of control’
  • The majority of SME owners in the sector say they lack support and feel they are running their business alone, on average, more than three times per week

The majority of SME owners in the hospitality & leisure 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 92 in the hospitality & leisure 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 hospitality & leisure sector include competitor activity has intensified; important business decisions have become more data driven and the burden of regulation is shifting (as the country prepares for Brexit).

Dave Gosling, partner and head of hospitality & 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 hospitality & leisure 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 hospitality & leisure sector know they could be facing diverse risks in the year ahead. The top four risk factors they identified were cash flow difficulties; geopolitical uncertainty and its effect on trading activity; breaks in supply and a general lack of resources – in particular, senior management time.

Most SME owners in the sector are happy with their work life balance. However, on closer questioning, the picture is more ambiguous. About half (48%) admitted they sometimes find it difficult to switch off properly during their leisure time and a quarter (24%) described their work life balance as ‘completely out of control’.

Dave Gosling 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 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 Dave Gosling.

To view how SMEs are re-writing the rules, visit here.

 

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