A new year brings new challenges, and as 2018 rolls in PwC delves into six key areas likely to impact private businesses, such as digital disruption, the political landscape, and cash flow concerns.

Corporate governance

As private businesses are playing an increasingly influential role in the UK economy, corporate governance is in the spotlight this year, with the FRC having launched a consultation on a comprehensive shake-up of the UK Corporate Governance Code.

PwC says this “will include greater regulation for large unlisted companies – a clear recognition of their importance.”

The firm adds: “Private businesses will need to start preparing now to ensure they meet the proposed standards, as they will be held accountable if they don’t comply. Reviewing existing reporting and transparency against the FRC proposals is a good place to start.”

The consultation concludes 28 February 2018, and PwC urges people to prepare to respond to it. The government plans to bring legislative reforms into effect by June 2018.

Cloud technology

Digital transformation continues to impact businesses and a key tool for private businesses to leverage is cloud computing. While many have already incorporated cloud technology into their ways of working, many private businesses still use legacy IT systems.

PwC touts its benefits, explaining: “Cloud computing eliminates the capital cost of hardware and software, setting up and running on-site data centres. It gives businesses access to the latest software, simplifies data backup, disaster recovery and business continuity as well as providing invaluable data analytics tools.”

Furthermore, “the cloud is ideal for smaller private businesses looking to grow, providing scalability without complexity. It also enables more effective remote working and collaboration between teams.”

Cyber security

Cyber security is of increasing importance in the digital age, evidenced by the series of high-profile hacks in 2017 including the WannaCry virus targeting the NHS and the hacks of Deloitte and Uber.

The firm adds: “Recent PwC research revealed only 12% of small businesses in the UK have cyber security insurance. This is a worryingly small percentage in a time where cyber-attacks seem increasingly inevitable.”

“Many organisations don’t realise how vulnerable they are to cyber threats and remain in the mindset of thinking it won’t happen to them, but taking the risk seriously and having a crisis plan in place is critical to minimising possible damage.”

Brexit negotiations

Another continuing concern for businesses in 2018 will be ongoing Brexit negotiations. PwC stresses it is important for private businesses to monitor progress “so they can continue to react and adapt to the outcomes, particularly with regards to trade deals and passporting rights.”

“Private businesses should be looking to conduct impact assessments and create Brexit plans to help them protect their existing interests and make the most of new opportunities.”

Digital disruption

Cloud technology and cyber security will be key areas of digital transformation going into the new year, but private businesses should be prepared for digital disruption in all forms.

“Any business no matter it’s size or industry can be disrupted. Being alert to where competition may come from and preparing a response is essential to staying on the front foot.”

Other areas to look out for include artificial technology, robotics and blockchain.

PwC says: “Strategic planning is a great way to combat uncertainty as it creates clarity, giving the business a purpose and goals to focus on.”

Cash is king

While businesses should be mindful of all of the above, PwC urges: “Businesses need to remember their bottom line. Cash is king and companies can’t afford to forget cash flow in the race for profits and revenues and in pursuit of new ventures.”

“It’s good to branch out, but it’s also important to focus on maintaining existing strengths and ultimately staying in business.”

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