In this article, we explore the financial forecast and look at business planning for 2025 to promote growth and success.
The British Chambers of Commerce (BCC) has released its Quarterly Economic Forecast, upgrading growth expectations and forecasting for 2025-26.
Overall, the UK economy shows signs of improvement, but we are not out of the woods yet. Following a better-than-expected performance in 2024, momentum is expected to slow.
Key Economic Projections Include:
- GDP Growth: 1.1% in 2024, 1.0% in 2025, and 1.1% in 2026
- Inflation (CPI): 2.6% by end of 2024, 2.2% in Q4 2025, and 2.1% in Q4 2026
- Interest Rates: 4.9% by the end of 2024, 4.3% by the end of 2025, and 3.8% by the end of 2026
David Bharier, Head of Research at the BCC, cited significant global conflicts, trade tensions, and the upcoming US election as factors that could create a climate of hesitation for firms, particularly those involved in international trade.
Nevertheless, an informed growth strategy will help businesses leverage change, promoting sustained growth.
Let’s explore the critical actions for your business in 2025.
1. Accept That The Customer is Always Right
Understanding and responding to changing customer needs is crucial. Engaging in dialogue with current and potential customers about their future concerns allows SMEs to align their strategies with changing market needs and stay ahead of competitors.
2. Invest in Technology and Digital Transformation
Technological advancement remains a key driver of business success. Leveraging data analytics for informed decision-making should be at the core of commercial and market plans, helping businesses identify growth opportunities and optimize strategies.
In addition, as businesses increasingly digitize their operations, strengthening cybersecurity is critical to protecting data, ensuring seamless operations, and maintaining customer trust.
3. Embrace Talent Management and Upskilling
Empowering employees through upskilling and reskilling initiatives is essential for SMEs to remain competitive and innovative.
Offering remote and hybrid working options and diversity-focused talent acquisition strategies will help SMEs attract and retain skilled professionals in a competitive and unstable job market.
4. Explore Financing Options for Growth
Exploring tailored, long-term financing solutions and alternative lending options can give SMEs the capital to execute ambitious growth plans without sacrificing control or equity.
Evaluate traditional bank loans, alternative lenders, and equity financing options and consider acquisition finance if expansion through M&A is part of your strategy.
Budgeting for 2025
Effective budgeting is crucial for realizing your 2025 goals. Consider the following when developing your budget:
- Revenue projections
- Cost management
- Cash flow planning
- Investment allocation
- Contingency planning
- Regular review and adjustment
Additional Considerations for 2025
There are some additional considerations for the most ambitious businesses looking to scale.
Sustainability: Incorporate sustainable practices into your business model to meet growing consumer and regulatory demands.
Geopolitical Awareness: Stay informed about global events that could impact your supply chain, market demand, or regulatory environment.
Partnerships and Collaborations: Explore strategic partnerships to expand your capabilities, enter new markets, or share resources.
Innovation Culture: Foster a culture of innovation within your organization to stay ahead of industry trends and competitor moves.
Risk Management: Develop comprehensive risk management strategies to protect your business from potential disruptions.
WrightCFO is engaging with scaleups to help them develop their growth strategy for 2025. If your business is ready for expansion, call us today.
This article was originally published on LinkedIn on 18th September 2024.
