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There is much to admire about the current UK business landscape, which has helped usher in an influx of smaller businesses. Small and medium-sized enterprises (SMEs) now provide serious competition for many large corporations, and contributed a combined £1.8 trillion to the economy in 2016, according to the Federation of Small Businesses (FSB).
However, whilst the UK is lightyears ahead of some of its counterparts when it comes to nurturing new business, there is still work to be done. SME owners have identified numerous challenges that they face in today’s climate. Below we share some guidance on how these can be overcome.
Financial struggles
Financial management is always high on the agenda for smaller firms competing with larger companies. Business costs have risen above the rate of inflation, and the impact of Brexit on exchange rates has resulted in further hikes for firms that import goods.
Sound financial management is needed regardless of market conditions, but even more so when navigating what’s currently quite a volatile environment. Whilst firms may not necessarily need a CFO, it may pay to employ a financial consultant who can fulfil the role on an ad-hoc basis as needed.
Securing funding in a company’s infancy is also a recurring issue. Six in ten respondents to ‘Entrepreneurial Britain’, a survey conducted by the Telegraph, claim to fund their ventures through external sources such as banks or grants. Government schemes have also been introduced to support UK businesses, though take-up has often been underwhelming.
In August 2017, the Government reported that only 230 small businesses had taken advantage of its bank referral scheme, a regime designed to introduce businesses who had been refused bank loans to alternative lenders. Exploring such schemes could be the answer many small businesses are looking for.
Access to expert advice and support
Tax, financial management and legal guidance are three areas of business that often require specialist support. Four in ten respondents to Entrepreneurial Britain claim Government assistance in areas such as these has been slow, whilst 100% would welcome a more proactive approach.
Consequently, many small businesses rely on word of mouth within their industry, and there have been calls for organisations to support growing businesses through mentorships and management advice.
There are now several online forums set up to lend support to UK business owners. UK Business Forums and the Forum of Private Business are just two examples of places where business owners can access specialist guidance.
Recruitment and talent management
Cross-sector skills shortages in the UK are nothing new, but do seem to be intensifying as the UK workforce struggles to keep pace with advancements in critical industries. Research by Robert Half shows that 92% of HR directors struggle to find skilled professionals today.
Britain’s imminent exit from the EU could cut off a valuable talent supply line for firms, meaning this problem may soon worsen. This would likely result in tougher competition for fewer candidates, meaning companies with less financial muscle will have to consider other ways to attract skilled workers.
UK staff are increasingly valuing a healthy work-life balance, and arrangements that promote this have a lot of pull when it comes to hiring new candidates. Flexible working arrangements, including working from home and reduced hours during the summer, are easily adoptable. Cycle purchase schemes and free gym memberships are examples of further perks that can help attract talent.
Expansion
Sound financial management, funding, and securing in-house talent are all necessary components to the growth of an organisation, so it stands to reason that resolving these issues will put your firm in good stead when it comes to growth.
But thanks to a combination of the challenges above, and in large part down to the uncertain business environment brought about by Brexit, growth plans for many smaller firms have been stunted in 2017. Those who are looking to expand their business in the current climate are advised to seek the assistance of an expert.
Working with a business mentor can help aid business expansion in a cost-efficient way. Whether you’re looking to expand your client base, or offer new products or services, you need to weigh up the potential outcomes and approach your goal in a way that minimises risk. Similarly, a business mentor can help when it comes to upskilling and enhancing your team, and can introduce your company to additional sources of funding.
For help and advice in navigating the challenges in your business, call us on 0330 024 3200 and speak to one of our friendly experts.
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This article is written for general interest only and is not a substitute for consulting the relevant legislation or taking professional advice. The authors and the firm cannot accept any responsibility for loss arising from any person acting or refraining from acting on the basis of the material included herein.