While 92% of entrepreneurs and SME owners plan at least one strategic move in 2025 – from AI investment to targeting new customer segments – over six in ten (63%) are unsure their business will survive the year ahead.

The findings reflect a sector full of ambition, yet calling out for support. Beyond financial pressure, founders highlight the need for better access to AI training and industry advice. With nearly one in five (18%) calling the year ahead “overwhelming,” the data points to a broader support gap, toward systems and policies that help founders adapt, compete and grow.

A sector under pressure – but not standing still

Nearly a quarter (24%) of UK entrepreneurs and SME owners say their businesses are not growing with financial pressures likely contributing to their inability to scale. Across the board, respondents highlight a range of immediate challenges shaping today’s business landscape:

• 42% cite inflation and rising borrowing costs
• 32% are feeling the heat from increased competition – both domestic and international
• 30% are struggling to meet changes in consumer behaviour and expectations
• 30% report rising employment costs due to changing legislation (e.g., NIC changes)
• 24% are navigating complex compliance requirements
• 20% highlight global trade uncertainty, UK-US relations and wider geopolitical tensions

Yet despite these pressures, many are approaching the year ahead with focus:

• 92% plan at least one major business move in 2025
• 61% want to grow within the UK – rising to 71% among founders aged 18-34
• 44% are targeting new customer segments – again higher among younger entrepreneurs aged 18-34 (61% vs 39% aged 45–54)
• 42% plan to invest in new technology or infrastructure
• 20% are considering expanding or relocating outside the UK

Hiring strategies shaped by economic headwinds

Hiring plans across the UK SME landscape are evolving, as founders look to balance ambition with cost control. 76% of respondents say their approach to hiring has changed due to economic conditions – rising to 96% among entrepreneurs aged 18–34.

Still, nearly half (48%) of respondents are still actively hiring:

• 20% say they’re hiring both strategically – to drive growth – and operationally, to support core functions
• Younger entrepreneurs are leading the charge, with 69% of 18–34s actively hiring, compared to just 41% of those aged 45–54

Meanwhile, 29% say they would benefit from bringing in new talent, but have paused hiring or reduced headcount in an effort to manage costs.

Beyond funding: entrepreneurs want digital tools, expert advice, and breathing room

While access to capital remains important, it’s not the only thing respondents say they need to succeed. Among the most in-demand areas of support for the next five years are:

• 34% would value digital tools and platforms to streamline operations
• 28% want access to industry-specific insights and advice
• 25% see AI training as key to improving operational efficiency
• 20% would benefit from mentorship from experienced entrepreneurs

This reflects a shift: founders are building differently – and need systems that match. This is also visible in the skills respondents believe will be most valuable over the next five years:

• 48% say digital and tech capabilities (e.g., AI, data analysis, and automation)
• 44% point to financial literacy and strategic budgeting skills
• 42% cite marketing and brand positioning skills
• 33% highlight networking and partnership-building skills  – a skill more valued by older respondents aged 45–54 (45% vs 29% aged 18–34)
• 20% say crisis management and resilience-building skills

Liina Vahtras, Managing Director at e-Residency, said: “We talk a lot about funding, but what many founders lack is access to the right digital tools and support systems. Traditional UK business structures – from training to hiring models – often don’t reflect how people are actually building companies. At e-Residency, we’re seeing more UK entrepreneurs turn to digital-first solutions that move as fast as they do. And increasingly, they’re using that freedom to design companies that don’t look or operate like the ones that came before.”

For more startup news, check out the other articles on the website, and subscribe to the magazine for free. Listen to The Cereal Entrepreneur podcast for more interviews with entrepreneurs and big-hitters in the startup ecosystem.