Future-Focused Foundations Rachel Watkyn OBE, founder of Tiny Box Company, shares insights on entrepreneurship trends, sustainability, and navigating economic challenges in 2025.

As the founder of Tiny Box Company the UK's largest e-commerce sustainable packaging business based in Forest Row, Rachel Watkyn brings a wealth of expertise to the table. In this Entrepreneur UK interview, she shares her insights on the trends set to shape UK entrepreneurship in 2025, discusses how her company is preparing for economic challenges, and emphasises the critical roles of sustainability, talent management, and innovation in navigating a rapidly changing business landscape.

What trends do you expect to drive UK entrepreneurship in 2025?
With rising costs and a change in spending patterns, consumers are looking for ever cheaper alternatives with "no frills". In addition, there is high demand for simple "one stop shop" solutions, so entrepreneurs are likely to hone in on tech and AI solutions that ease pain points in the selling process, along with predictive AI on what consumers may want to purchase.

There is also still much of a focus on experiences and with the singles market still being a growth sector, events around activities for singles is likely to offer a range of opportunities for entrepreneurs.

However, due to the budget adding a huge burden on to the entrepreneur, it is likely that many will simply move to "friendlier" landscapes such as Dubai and Cyprus or will simply choose to join the workforce instead.

With increasing financial pressure in the form of wages / NI and higher debt costs, the trends on entrepreneurship of those left, are going to be focussed even more on innovation whilst taking more calculated risks. Entrepreneurs are going to want much higher assurances that new ventures will pan out favourably before taking the leap and innovation and investment in tech is going to be absolutely key in order to remain competitive, especially with the influx from Asia in certain sectors such as retail.

How are you preparing for economic changes in the new year?
At this stage, we are in deep dive analysis to model expected costs versus sales and margins over the coming year. We will then be modelling different scenarios to see how we can stay afloat, knowing that just the NI costs are going to add at least £100k to our bottom line.

What sustainability initiatives will you focus on in 2025?
Sustainability is at the heart of everything we do, but 2025 will be a year of continuing to find the most sustainable solutions available throughout the world for our customers, that still provide a useful solution at a price point that works for both our customer and us.

What challenges do you foresee with talent management in 2025?
Talent management has been a huge issue for the last three years and is showing no signs of easing. The type of talent has changed significantly, for example from the traditional salesperson model to digital marketing and social media. We are trying to develop talent in-house as fast as possible, but there is a huge skills gap which is not always filled successfully by using agencies. Young talent coming through has very different expectations of a working environment, which means boundaries have to be agreed and in many cases a more flexible approach required by the organisation.

Wage inflation is ongoing above the base rate, fuelled by minimum wage levels rising that then have a knock on effect at the higher levels, meaning continual benchmarking is required to ensure that talent isn't lost to the opposition.

How will AI and automation impact your business strategy next year?
At the moment the real practical uses of AI are in infancy, but solutions will continue to develop over time and are likely to become a lot more relevant in areas such as copy writing, PR, customer services and social media.

What's your approach to securing funding as we enter 2025?
The current focus is on tightening operations and costs to stay afloat and therefore not incur debt costs or lose equity. By controlling costs if sales are maintained, self funding is the preferable model, but this will depend on growth opportunities. If any growth opportunities do occur it will be a funding approach that works with the level of funding required – ie short term debt for short term solutions or equity funding if a longer term solution is required.