Record levels of inflation, with rates reaching 10.5% in December 2022, alongside the rising cost of living due to current fuel, electric, gas and food prices, are placing increased pressure on SMEs.  In fact, data recently released from Towergate Insurance highlights that more than half (57%) of small businesses feel at risk of closure in 2023 as a result of this current economic instability.

Whilst it’s not the first economic downturn SMEs have been up against, that doesn’t mean there’s an easy ride ahead. In July 2021, our research found that two thirds of British SME’s agreed that they had shown more resilience during the pandemic than larger businesses. But, in spite of this resilience, I recognise that 2023 is set to be a tough year. And, with business leaders set to face further difficult - and sometimes unwelcome - business decisions, if one thing’s for sure, it’s that right now, small businesses cannot afford to suffer from broadband disruption or connectivity issues.

Broadband investment during an impending recession

We know that SME leaders are worried about the impact of the impending recession. In fact, according to recent research from Sky Connect, this is a real concern for SME leaders this year, with nine in ten admitting that they are worried about experiencing a UK recession.

But, what we found was that as SME leaders look to navigate a particularly challenging economic climate ahead, they still recognised the importance of a reliable broadband service as part of that journey.

For example, the same data revealed that almost 40% of SME owners have still increased investment in their business broadband over the past 12 months. This is despite concerns around rising inflation (60%) and rising energy bill costs (59%), which is testament to the fact that small businesses are ready to trust and stay with providers that offer good customer service (46%), ultrafast speed (46%) and automatic 4G back-up (31%).

It is my opinion that broadband is therefore not something businesses will (or should) be thinking about day to day, and that is what the sector must aim for – to have confidence that broadband is simply working and supporting SMEs in adapting to this increasingly digital world.

As soon as internet services fail to meet high standards, damaging consequences will be felt by both customer and vendor, and investment will drop.

Service providers duty to businesses this year

Operating a small business during a recession can feel particularly isolating. And what's more, time-poor business leaders have little to no time to be worrying about the performance of their broadband services.

We know that there are specific services that SME leaders expect from their broadband providers. And good customer service is one of them. Our research from October 2022 revealed that in order to stay with their current broadband provider, SME owners who currently use broadband expect good customer service (46%), quick access to the customer service team (26%) and the security of long term fixed contracts (22%).

There’s an opportunity for broadband providers this year to stand by SMEs' side through particularly challenging times. And, with data from Iwoca revealing that more than 402,000 new businesses were registered in the UK between January and June 2022, it’s clear that whilst 2023 is set to be a tough year, entrepreneurs are prepared to battle the storm. Excellent broadband is going to be make or break for new small businesses as well as those who are still recovering post-pandemic and preparing for further disruption. With increasing revenue and winning loyal customers a priority for SMEs this year, it has never been more important for businesses to be able to keep up with the rapid changes and stand out against competitors.