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‘Most turbulent time ever’ for over a third of SMEs, as experts advise British businesses to prepare for even greater change

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‘Most turbulent time ever’ for over a third of SMEs, as experts advise British businesses to prepare for even greater change
  • 2.6 million small business owners have genuine concerns about the future, but experts predict AI advancements, hyper-connectivity and the end of late payments spell the end of routine for SMEs
  • Report indicates owners are pumping almost £12,000 of their own money into their business as one in four worry their company will fold in the next five years
  • Small business owners of the future will be more socially-conscious, rely less on email and computer screens, and fluent in hiring staff with multiple jobs

As this tumultuous year draws to a close, 2.6 million small business owners (46 percent) admit to having genuine concerns about the future – so much so that a quarter believe their company will fold in the next five years, according to new research.

Business Rewired, an in-depth report by global small business platform Xero examines SME owners’ greatest concerns for the future, up against the emerging trends they will need to prepare for. These mounting concerns include late payments (54 percent), cyber-attacks (27 percent) and tax rates (44 percent).

Other things threatening their future existence include Brexit (44 per cent), employee recruitment costs (19 percent) and maintaining or increasing levels of productivity (31 per cent). More than a third (37 per cent) say this is the most turbulent period they have ever experienced and on average they have pumped £11,846.45 of their own money into their business. Over a quarter (26 per cent) say their business is leaving them out of pocket.

The pressures of running a business in the current climate has impacted the mental health of more than a third according to the research, and small business owners work an extra nine hours a week on average in addition to their standard working hours.

It’s not all doom and gloom however, leading business futurologist Gerd Leonhard predicts a brighter picture of what the future holds for the 5.8 million SMEs across the UK.

Gerd Leonard, business futurist and contributor to the report, says: “Humanity will change more in the next 20 years than in the previous 300. We will see the biggest technological transformation in human history – impacting where, how and why we work.”

“Automation is reducing the need for humans to undertake routine tasks and the world of work is heading towards a dramatic reset. Everything we assume about work, jobs, training and education is being challenged by exponential scientific and technological progress. Whether you’re a small business owner, an accountant, bookkeeper or advisor, these emerging trends will affect you very soon.”

According to Gerd, over the next 20 years, AI will revolutionise routine as we know it and cut working hours by up to half; a ‘blended workforce’ will transform the number of employers workers have; and digital transactions and the death of the 30 day payment model will spell the end of late payments, as SMEs move towards a happier, healthier economy.

 Gary Turner, Xero co-founder, says “The ways small businesses work now are dramatically different from the 1980s when the first personal computers arrived. But business needs to adapt to greater changes coming their way. New technologies will hasten a far greater consciousness towards the biggest killer of small businesses. Cash flow problems will decline as instant payment technologies take root as a cultural norm. I believe what we’ll see is 30-day payment terms going the way of the fax machine.”

Emma Gannon, author, podcast host and contributor to the report, adds: “We are in a time when young people are job-hopping more than ever, and the pressure is on for companies to retain their employees. This means adapting to the changes that are here right now and coming in the next few years.”

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H&M, IKEA and Stora Enso backed TreeToTextile builds sustainable fibre demo plant

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H&M, IKEA and Stora Enso backed TreeToTextile builds sustainable fibre demo plant 1

STOCKHOLM (Reuters) – A venture part-owned by Finnish forestry group Stora Enso, Sweden’s H&M and IKEA said on Tuesday it was set to build a demonstration plant in Sweden for a new, more sustainable wood-based textile fibre after years of research.

To markedly reduce their climate footprint and pollution, large apparel and furniture brands are in dire need of affordable greener alternatives to cotton, traditional viscose and polyester. Several Nordic pulp makers are part of projects developing new clean ways https://www.reuters.com/article/us-nordics-forestry-idCAKCN0WF076 to turn trees into textile fibre.

TreeToTextile said in a statement its plant would have a production capacity of 1,500 tonnes and its owners would fund the bulk of the 35 million euro ($42.6 million) investment.

“The novel process is deliberately designed to have low energy demand and low chemical need. It is engineered to suit large scale production and includes a recovery systemfor reusing chemicals,” it said.

“By investing in a demonstration plant, we are finally on the go. With it we are turning years of R&D into reality to increase the biobased share on the textile market to support climate action.”

TreeToTextile, whose fourth part-owner is innovator Lars Stigsson, said the plant would be located at Stora Enso’s Nymolla mill in Sweden, and its construction would start in the near future.

Viscose is the main existing textile fibre from wood pulp – followed by the newer lyocell which has a cleaner manufacturing method. Production is dominated by Austria’s Lenzing, India’s Aditya Birla and China’s Sateri.

($1 = 0.82 euros)

(Reporting by Anna Ringstrom; Editing by Angus MacSwan)

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IHG books $153 million loss, Holiday Inn softens coronavirus blow

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IHG books $153 million loss, Holiday Inn softens coronavirus blow 2

By Tanishaa Nadkar

(Reuters) – InterContinental Hotels booked an annual loss of $153 million on Tuesday, pummelled by repeated COVID-19 restrictions and lockdowns, but said a faster recovery in its Holiday Inn Express brand had helped it outperform in key markets.

The company, which previously scrapped its final dividend, said 2020 was the most challenging year in its history as revenue per available room slumped 52.5%, with global travel and entertainment spending remaining under pressure.

Pinning its hopes on the global roll-out of COVID-19 vaccines and a wider economic rebound, IHG said the industry was unlikely to see a recovery until later in the year but hinted that global travel was starting to recover.

“People want to travel again…It is the thing that people have missed most and so there is enormous pent up demand to travel,” Chief Financial Officer Paul Edgecliffe-Johnson said, adding that “travel will come back very rapidly.”

Shares of the company were up 3.8% at 5,516 pence by 0845 GMT, amid a near 3% rise on the FTSE 350 travel and leisure index as Britain saw a surge in flight and hotel bookings after the government said would-be holidaymakers will be given clarity on making plans for the summer by April 12.

Demand remained stronger in IHG’s Holiday Inn Express business, which represents about 70% of its rooms in the U.S. market and has historically been impacted less and recovered faster than other segments in economic downturns, the company said.

“IHG is at the start of a prolonged period of commercial recovery,” Peel Hunt analysts said in a note.

Still, IHG reported a group operating loss of $153 million for the year ended Dec. 31, compared with a profit of $630 million last year.

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Devika Syamnath and Alexander Smith)

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Aviva sells French business to Macif’s Aéma Groupe for $3.9 billion

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Aviva sells French business to Macif's Aéma Groupe for $3.9 billion 3

LONDON (Reuters) – Aviva has agreed the sale of its operations in France for 3.2 billion euros ($3.89 billion) to Macif’s Aéma Groupe, as part of the British insurer’s shift to focus on its core operations in Britain, Ireland and Canada.

London-based Aviva, led by boss Amanda Blanc, said the sale would increase excess capital by 2.1 billion pounds ($2.95 billion) and cash of around 2.8 billion pounds.

Aéma Groupe, formed in January through the merger of French mutual insurer Macif Group and Aésio Mutuelle, has 8 million customers and a turnover of 8 billion euros.

Aviva France has 3 million customers and 7.8 billion euros in revenue. It covers life insurance, property and casualty and asset management markets in France.

Aviva’s share price rose by 1.7% at the open in London.

“The transaction will increase Aviva’s financialstrength, remove significant volatility and bring real focus to the Group,” Chief Executive Officer Blanc said.

Aviva expects to use the proceeds of the sale to support debt reduction, invest for long-term growth and return excess capital to shareholders.

The sale is central to Blanc’s turnaround plan aimed at streamlining its business after prolonged share price weakness has concerned investors.

The insurer, which aims to complete the disposal by the end of 2021, is looking to sell its continental European and Asian businesses, it said last year.

Final bids for its Polish operations that could fetch around 2 billion euros are due on Friday, sources have previously told Reuters.

It is also in the process of selling its Italian business, sources had said.

($1 = 0.8218 euros)

($1 = 0.7108 pounds)

(Reporting by Clara Denina; Editing by Rachel Armstrong, Louise Heavens and David Evans)

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