2025 presents a complex landscape for businesses, with a huge variety of factors at work. Companies are planning strategically to foresee and work around future business challenges, including a fragile international trade network, shifts in government spending and major technological developments. Here are five potential challenges to businesses this year and what you can do about them.
New Budget Pressures And Shift In Government Spending
Governments worldwide are making major shifts in their spending, particularly in areas that were receiving support during the pandemic. The tough fiscal environment in the UK means that there’s limited room for a significant budget in non-priority areas, which could cause future business challenges and impact infrastructure, regional investment and business support schemes.
Businesses should be reassessing their own financial position, particularly if they’re reliant on government contracts or support. Prepare for shifts in budget or policy and build up a strong reserve of cash to weather major changes in government spending.
Global Trade Concerns Over The ‘Trump Tariffs’
While the trade situation between the UK and the EU has somewhat stabilised in the wake of the trade talks between the two in May this year, there is still significant progress to be made before an official agreement is made. Moreover, the economic uncertainty caused by the ‘Trump tariffs’ has so far had less of an economic impact than was originally predicted, but the full ramifications are yet to be fully unveiled.
Keep a close eye on this area and consistently update your forecasts so that you can catch future business challenges caused by trade developments early and make yourself as resilient against them as you can.
Threats To Business Cybersecurity
Businesses around the world are increasingly coming under attack on the digital front, with many new sophisticated AI-powered cyberattacks being seen, including phishing and ransomware. These cyberattacks are working, and vulnerabilities in businesses’ systems are being exploited more than ever before. Therefore, it’s highly recommended that companies take care to invest in their cybersecurity now to prevent becoming victims of these attacks.
AI Regulation And Compliance
The EU’s AI Act came into effect in August last year, providing the first ever legal framework for AI to be introduced. It places a risk-based approach in place for AI systems that will help to guarantee safety and protect rights, but also place restrictions on how AI can be used. This could present future business challenges for your business if you make use of AI as part of your business model. If your business is using AI, it’ll be worth reviewing this against the new AI Act to see if your use falls into compliance or if you’ll need to make changes to retain access to the EU market.
Volatility In The Labour Market
One of the biggest challenges facing small business owners is the volatility of the labour market. Recruitment issues persist due to major skill gaps and an ageing workforce, creating significant challenges across a wide range of sectors. Investing in training opportunities for your employees ensures that your company has and retains the skills it requires to operate efficiently.
Trying to keep ahead of future business challenges can be tough, and you can’t foresee every eventuality. If your business is under financial pressure, then give Ballard’s Business Recovery a call. We specialise in delivering tailored business rescue solutions to help you get your company back on track quickly and efficiently.
