Now that we are well into 2025, we thought it might be useful to conduct some research into the 10 biggest concerns for an MD or CEO of an SME in 2025.

For an MD or CEO of an SME (Small and Medium-sized Enterprise) in 2025, the business landscape is constantly changing due to economic, technological, and societal factors. Here are the 10 biggest concerns you are likely to face in 2025

1. Economic Uncertainty 

With economic cycles in flux, inflation a worry, and global supply chain issues, MDs & CEOs of SMEs are concerned about managing rising costs, especially for raw materials and people. The uncertain economic outlook makes it difficult to plan effectively and predict future cash requirements and profitability.

2. Talent Shortages and Employee Retention

The "war for talent" is still very much a reality in 2025, as skilled workers remain in high demand. Vacancies are lower than they were in pre-pandemic times. MDs & CEOs need to attract and retain top talent, using all the tools available including, offering competitive benefits, some remote work flexibility, and career growth opportunities. Employee burnout and ‘quiet quitting’ are also concerns. Another concern is underperformers, with so few jobs available, it is unlikely they will leave of their own accord so they need to be addressed.

3. Cybersecurity Threats

Most if not all organisations are now reliant on digital technologies. Protecting customer data and company systems from cyber-attacks is a critical concern. Cyber threats, like ransomware and data breaches, have devastating financial and reputational consequences. 

4. Adapting to AI and Automation

AI anxiety is now quite common among MDs & CEOs of SMEs. Leveraging artificial intelligence (AI) and automation to improve efficiency, streamline operations, and stay competitive is a double-edged sword. MDs & CEOs must be alert to and invest in the right emerging AI technologies while managing the costs and potential job issues that may arise.

5. Supply Chain Disruptions

Even though global supply chains have started to recover post-pandemic, there are still risks from geopolitical tensions, transportation bottlenecks, and the ongoing volatility in raw material costs. SMEs would like dual supply chains (where possible) and agile supply chain strategies with the ability to pivot quickly.

6. Sustainability and Environmental Impact

Customers, investors, and regulatory bodies are increasingly wanting to know about suppliers' environmental footprints. MDs & CEOs must ensure their operations are more sustainable, comply with green regulations, and meet customer demand for ethical and eco-friendly practices - whilst being pragmatic about the impact these activities will have on the business.

7. Regulatory Compliance

Navigating a growing body of regulations—from data protection (GDPR and its global counterparts) to environmental standards and new employment laws—is a complex and ever-evolving challenge. MDs & CEOs need to stay on top of these legal changes to avoid conflict and potential penalties.

8. Digital Transformation and Innovation

The pace of technological change is accelerating faster than ever before. MDs & CEOs must invest in digital transformation to remain competitive, including adopting cloud services, e-commerce (where appropriate), and advanced analytics. Staying ahead of the curve on tech innovation is essential but can also be costly and resource-intensive.

9. Customer Expectations and Personalization

Customers in 2025 expect personalised experiences, especially in the B2C world. SMEs must leverage data analytics to understand their customers’ preferences and offer tailored products or services wherever possible. Keeping up with these expectations while maintaining brand consistency can be a significant challenge.

10. Access to Capital and Financial Management

Funding remains a top concern for SMEs, whether it's securing loans, raising capital, or managing cash flow. With relatively high interest rates and investors being selective, managing financial health is vital. MDs & CEOs also need to balance short-term cash needs with long-term growth.

These challenges require a delicate balance of strategy, risk management, and innovation. MDs & CEOs who can adapt quickly and embrace emerging technologies while keeping aware of market shifts will be in the best position to succeed.

Helping MDs & CEOs of SMEs through such challenges is what we do in our Pabasso peer advisory boards.

We are always looking for MDs & CEOs of established SMEs to join us, as well as experienced business leaders with time on their hands to Chair more Pabasso - Peer Advisory Board Associates peer advisory boards, currently only in Yorkshire and the North East.

If you would like to know more about how we help MDs & CEOs and support Business Leaders for greater success, why not contact our Exec. PA Imogen Laverick at ial@pabasso.com or one of our Directors, Richard Doyle at rad@pabasso.com or Carlos Horner at cph@pabasso.com to set up a call and to see how you might benefit from being in a Pabasso - Peer Advisory Board Associates advisory board?

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