Happy New Year! Why we should feel good about business in 2024
The fireworks have faded and resolutions to get fit may already be faltering, but January can be a hugely positive moment and a key one to plan for success. It may sound like a modern motivational mantra, but it was Benjamin Franklin who quipped, ‘By failing to prepare, you are preparing to fail’.
Now is the moment to map the year ahead which, according to Complete Commercial Finance’s directors Michael Moore and Karl Lanham, is already looking more positive than 2023. None of us have a crystal ball, but as a business owner having a clear financial plan is key to protecting your firm against unforeseen events.
Rise in UK start-ups for 2024
According to new research by Enterprise Nation, the organisation which represents start-ups and small business, the number of people thinking about starting a new venture in 2024 has risen to 35 per cent – up five per cent on 2023 – with access to technology, business support and increased confidence cited as reasons for making the leap to ‘do something new’. Among established firms, confidence is also high with Virgin StartUp’s biannual Founder Barometer survey also revealing that 66 per cent of small business leaders are confident their company will be in a stronger financial position in six months’ time.
There is every reason to approach the year more optimistically, and forecasters at Oxford Economics, Investec and Deutsche Bank have predicted that inflation is on track to fall below the Bank of England’s two per cent target as early as April, potentially leading to a cut in the Bank of England base rate, which has remained resolute at 5.25 per cent since August 2023.
“Inflation is falling and consequently we are starting to see a more competitive marketplace with lenders offering lower rates in a bid to win business,” says Michael. “The Bank of England’s hike in base rate appears to have worked and inflation is falling,” adds Karl. “Whether it will reduce the base rate or not remains to be seen, but I think it unlikely we’ll see any further increase. Personal mortgage interest rates have already fallen to around four per cent and this has a knock-on effect in commercial lending.”
Rishi Sunak pledges tax cuts in 2024
One of the key shifts for 2024 is Prime Minister Rishi Sunak’s pledge to cut taxes this year, a central plank of his election pitch, having admitted that, “2023 was not easy,” and with Chancellor Jeremy Hunt due to give his spring budget on 6 March it will be interesting to see what support is offered to businesses.
“As a pre-election budget, there are likely to be lots of giveaways and incentives, but I suspect the headlines will predominantly be around personal finance,” says Karl. “I think it will be a feel-good budget and will add to the sense that we’re on top of inflation, interest rates have stabilised and the UK economy is going for growth, perhaps with further news on Corporation Tax. I imagine that Labour’s manifesto will be more positive too with outline plans for growing the economy on both sides.
“However, if you are planning for business you should be looking at the long-term over the next five years. The Capital Allowances which the Chancellor announced in November mean companies can claim 100 per cent first-year relief on qualifying plant and machinery investments until 31 March 2026, and with renewed optimism in the market now is a great time to consider upgrading operations and equipment to improve productivity.”
According to the British Chamber of Commerce’s quarterly economic survey published at the start of 2024, despite 56 per cent of firms expecting turnover to increase this year, only 24 per cent of firms reported an increase in investment in new technology last year, suggesting that there is scope for more businesses to make greater use of this tax incentive.
Stability and confidence fuel growth
“As things stabilise, lenders are able to be more sympathetic to finance applications and with an increasingly competitive market, now is a great time to move ahead with growth plans,” adds Michael. “Lots of businesses makes decisions based on interest rates, but lenders look 12 months ahead so it’s not always the best indicator of whether an application will be successful. Don’t put plans on hold, but talk with your commercial finance adviser to explore opportunities.”
“Last year, we had a number of shocks to the economy from rising inflation, commodity and labour prices to industrial action, but things are stabilising,” says Karl, “and now is the moment to plan and speculate on opportunities. We can help to facilitate growth with business finance and have access to more than 100 lenders, often with specialist products which may not be generally available, so it’s worth speaking to us about how best to approach borrowing to maximise your chances of a successful application.”
As with any business success, financial planning is key and whether it’s an initial review and chat to scope out what is feasible, Complete Commercial Finance’s directors are available for an informal call or meeting, so take the first steps and get in touch to make 2024 the year you move your company forwards.
