Uswitch, the business savings accounts expert, has published new research uncovering how UK small and medium-sized enterprises (SMEs) believe subscriptions will help them secure stability and growth.
Examining responses from 1,000 business leaders, Uswitch found that new revenue models, like subscription-based services, are allowing firms to feel like they have more control over their finances and have the ability to improve customer retention. In fact, 86 per cent of respondents said that a subscription model would help improve cash flow management, in turn offering a more predictable and manageable income stream.
Consequently, it should come as no surprise that 46 per cent of SME owners have already integrated subscriptions into their businesses. Whether they’re offering curated product boxes, regular services, or consultancy retainers, this shift is helping entrepreneurs move away from one-off sales in favour of more consistent income.
Some of the main benefits from using the service included customer retention (46 per cent), better business planning (46 per cent) and more predictable cash flow (43 per cent).
Who is driving change?
The data revealed that young entrepreneurs (aged 18 to 34) are 32 per cent more likely to use subscription models than those aged over 55. A staggering 94 per cent of younger SME owners say subscription-based services help improve cash flow, compared to just 70 per cent of baby boomers.
This generational shift highlights how younger business owners are more likely to embrace recurring revenue models to manage finances more effectively and navigate market uncertainty.
A new opportunity for B2B
Despite subscriptions being commonly associated with consumers and video streaming services such as Netflix, B2B companies have also had great success in this field. For small and medium-sized enterprises operating in the B2B space, the subscription economy offers a powerful way to stabilise revenue, build long-term customer relationships and reduce reliance on one-off transactions.
In competitive markets where customer acquisition costs are high, retaining clients through ongoing value and predictable service delivery can be far more cost-effective than constantly chasing new business. In fact, research shows that by strengthening customer loyalty, SMEs could increase revenue by as much as £66,000 annually for their B2B services.
Andy Elder, Uswitch business savings account expert, said: “Recurring revenue models aren’t just for big tech companies. We’re now seeing small businesses across retail, consultancy, and services adapt subscription models to create predictable income streams and strengthen their cash flow.
“For many small businesses, managing cash flow is one of the most difficult tasks, especially when payment cycles are unpredictable. Subscriptions could give SMEs more control, helping them plan ahead and reduce reliance on traditional lending or experiencing last-minute funding gaps.”
Overcoming challenges to adoption
Subscriptions have many benefits, but several factors still hinder their adoption. The top-cited reason was uncertainty about return on investment (30 per cent). Twenty-seven per cent of respondents stated changing existing pricing structures was challenging, while 26 per cent said complex billing or tech setup was too big a hurdle.
Other challenges listed included a lack of customer interest or demand (25 per cent), and organisations simply stating their business model wasn’t suited for subscriptions (25 per cent).
For many, the hesitancy lies in shifting operational strategy and investing in new tools or platforms to support recurring payments. Some SMEs may struggle to adapt their existing models or remain unconvinced about the value subscription offerings could bring, with almost one in three (30 per cent) small business owners saying they remain uncertain about the return on investment associated with deploying a subscription model.
Still, with over 46 per cent already using subscriptions and another 21 per cent actively exploring them, the trend is clearly on the rise.
The subscription habits driving SME opportunities
As SMEs increasingly turn to subscription models to drive recurring revenue, it’s essential to understand the behaviours of the UK’s consumer base, and the opportunities they present. On average, UK consumers now spend £696 per year, or £58 per month, on subscriptions.
Subscription popularity remains high across key categories: video streaming services, retail, music, gaming and food.
Popularity by category in the UK:
Subscription video on demand (SVOD) | 71% |
Retail | 49% |
Music | 38% |
Gaming | 20% |
Food | 19% |
UK consumers typically hold an average of 3.3 subscriptions. Notably, 63 per cent of UK consumers say they maintain at least one subscription permanently, highlighting the potential for long-term customer loyalty.
However, signs of subscription fatigue are beginning to surface. The growth of new digital subscription acquisitions declined from 4.1 per cent in 2021 to 2.8 per cent in 2024. Additionally, 55 per cent of consumers reported cancelling subscriptions due to unclear pricing changes, while 70 per cent say they value flexibility, preferring services that allow them to adjust or cancel without penalty.
This growing demand for transparency and adaptability reflects a broader opportunity for SMEs: by offering flexible, well-communicated subscription options that have a clear value-add for the customer, businesses can build trust and boost retention.
