Ever watch The Apprentice and wonder how the candidates could run a bath let alone a business? And don’t get us started on how often they say ‘this process’. Argh. Are you ready to show them how it’s done by knuckling down to start a business in 2025? If you’ve got a good idea and the determination of a statue, then this blog from Heathhall Business Centre is for you.
Here are some business trends to be aware of in 2025
Starting a new business in the UK
Firstly some business stats. Did you know that at the last count in early 2024, the UK was home to around 5.5 million private sector businesses, and small businesses – those with fewer than 50 employees – make up 99.2%. Despite economic turbulence in recent years, the entrepreneurial spirit is alive and well. In the first half of 2024 alone, the UK saw a record 468,000 new businesses registered, an increase of over 6% compared to the same period in 2023.
But here’s the kicker: around 71% of businesses survive beyond their first year, which is encouraging, but only about half make it to five years. These numbers highlight the importance of preparation, resilience, and a robust strategy.
Which trends are likely going to be shaping new business in 2025?
The changing face of the UK High Street
The UK high street is changing rapidly. Encroaching competition from online and escalating costs have emptied units across the UK like missing teeth from a mouth. There are opportunities here for those with the ideas and creative vision to manifest them. Or perhaps you would instead like to be part of a thriving business community elsewhere, like ours at Heathhall Business Centre, depending on the nature of your business.
Experience retail
Experiential retail fuses shopping in the traditional sense with entertainment and is arguably already reshaping retail trends in the UK. Consumers increasingly seek memorable in-store experiences that go beyond bog standard transactions.
We’re talking stuff smart mirrors in clothes shops, and interactive workshops in cafes. The world’s your creative oyster really. This trend requires investment in technology, being ahead of the curve creatively, and connecting any in-store experiences with your online presence.
Operational costs
Rising operational costs are something you must think about in 2025. The UK government’s Employment Rights Bill aims to stamp out stuff like zero-hours contracts, for example. The National Living Wage is likewise set to increase from April 2025, with wages rising by 6.7% to £12.21 per hour, pushing up payroll costs.
Then there’s reduced business rates relief. Breaks for hospitality, retail, and leisure sectors will drop from 75% to 40%, only making tax burdens more onerous.
Brexit
Brexit continues to cast a long shadow over business in the UK, especially if you’re planning to export your products. But the good news is that the UK government has proposed a small business export taskforce, partnering with the Federation of Small Businesses to simplify guidance, streamline the process, and banish some of that infernal red tape.
Such changes could open doors to new markets and expand your international footprint.
Energy costs
Rising energy costs are a huge consideration if you’re thinking of starting a new business in 2025. The UK government’s Green Prosperity Plan shines a flicker of hope, aimed as it is at reducing costs and supporting sustainable growth.
Investment in renewable energy might also help small businesses gain access to cleaner, cheaper energy sources, and support manufacturers. Funding to sharpen competitiveness against European markets is also something that could help your business stand more than a fighting chance of getting off the ground.
Then there are Energy efficiency programs that provide subsidies for loft insulation and other cost-saving measures. The establishment of Great British Energy, a public entity, is expected to further keep energy prices for businesses on a stable footing. These initiatives promise long-term savings and sustainability for SMEs.
Sustainability
Gone are the days when sustainability was a buzzword or a box-ticking exercise. UK Government regulations now require online retailers to contribute to recycling costs, in line with physical retailers. This move targets electronic waste and aims to curtail the flow of goods to landfill.
Small businesses adopting green practices can gain an edge, as eco-conscious consumers increasingly favor companies committed to sustainability. Transparent communication about these efforts can also enhance brand loyalty and reputation.
AI
AI is not the future. It’s now. And it’s your friend, as a potential new business owner in 2025. From automating tasks to predictive insights into customer behaviour, AI tools empower SMEs the world over.
Chatbots for customer service, AI-driven marketing campaigns, or inventory management systems, AI tools can open the field for more people to start a business because it frees up your time. As AI technology evolves, you can expect more user-friendly solutions tailored to small businesses.
Sources:
ceotodaymagazine.com
gov.uk
fsb.org.uk