4 • Finance & legal


Smooth sailing F


or many start-up founders, the current economic landscape threatens their business’s


future and scalability. In 2022 alone, small- to medium-sized businesses were confronted with unpredictable market performance as a result of the Russia-Ukraine war, the energy crisis and the catastrophic rise in the cost of living. So how can start-ups ensure survival in this challenging environment? We spoke to several business leaders to find out.


LEVERAGE DIGITAL TOOLS Recent data from PwC found that although 90% of small business leaders are concerned about the economic climate, over 75% feel confident about achieving long- term goals. Typically, a looming recession requires cutbacks and a refocus. However, according to Sven Lackinger, co-founder of procurement soſtware platform Sastrify, the focus should be on streamlining your toolkit, as opposed to blindly cutting costs. “Many technology tools are central to business functionality, efficiency and user experience, so it’s not about cutting back on your tech. By reducing waste, discovering


New Year Business Guide - brought to you by APL Media • Wednesday 11 January 2023


We look at how start-ups can stay afloat with a recession looming. Words: Lili Dewrance


hidden costs and using tools more efficiently, businesses can realise significant savings.” As well as evaluating hidden costs,


firms must do more with less in order to survive the next recession, explains Lacey Hunter, CEO of Web3 start-up TechAid. “Adaptability is crucial for start-ups with no cash cushion,” she says. “They don’t, or soon won’t, have the luxury of raising another round to hire more staff. Outsourcing digital tools will be essential in accelerating start-up success.”


STAY NIMBLE Despite the rise in small business ventures during the pandemic, start- ups could be more vulnerable to a recession due to a lack of tangible experience. However, this isn’t necessarily a bad thing. Matt Bunn, founder of start-up


consultancy firm Scaling Partner, argues that although larger businesses have size and experience on their side, they are facing many of the same challenges, just on a grander scale. “This creates a need for innovation, meaning start-ups that can present a solid commercial proposition to their clients will


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have a significant opportunity to win large contracts, helping to accelerate their growth as a result. Firms that fail to address customer pain points are less likely to survive, reducing competition in the market as a result.” Hannah Thomson, CEO of online retirement activities platform The Joy Club, agrees with this view, noting that her experience of building a business during the pandemic has created an “adaptable,


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Dividend allowance cuts announced in November’s Autumn Statement will have big consequences for entrepreneurs and small businesses, making it difficult for entrepreneurial spirit to thrive. Against this backdrop, creating the most tax-efficient structures possible for business and personal finances has never been more necessary. Leading accountancy firm HW Fisher offers its top tips to navigate these challenging times: 1. Defer tax liabilities where possible. Due to the impact of inflation eroding the value of current tax liabilities, the debt will be worth less in the future.


2. Accelerate claims for tax relief as soon as possible, before the repayment value is further eroded by inflation. For example, charitable donations can be carried back, enabling tax relief to be received 12


months earlier than previously.


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nimble and experimental culture from the outset”.


BE READY TO RESET Being digitally dynamic extends beyond innovation and adaptability, as it allows start-ups to solve complex problems and operate sustainably. Matt argues that “the recession could act as a much-needed reset. It may prevent the nightmare stories where businesses grow beyond their means,


only to make drastic cuts when economic conditions worsen.” Hannah adds: “There must be


consistency across the business and a regular review of your tool stack to ensure you can stay innovative and adaptable to an ever-changing business landscape.” Start-ups have the agility to pivot


and respond to a crisis far more swiſtly than larger businesses, and this could be their salvation.


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