SMEs face raft of operational challenges

Small business growth in the UK trails behind many European nations according to Hiscox, and it represents just one of a number of challenges that UK businesses are currently facing.

Zurich also revealed earlier this month that the average SME is owed more than £16,000 by other businesses, with larger firms often responsible for the majority.

Tackling poor payment processes will be a key part of the new small business commissioner’s role – most businesses will hope for more certainty regarding timing and payments practices.

A reduction in regulations is also necessary, as a large proportion of businesses report that there is too much ‘red tape’ in the current system.

Compliance can be costly for small businesses, while the UK is ranked 25th globally for the ease of dealing with regulation according to the World Economic Forum.

More can therefore be done to support small businesses and to ensure that both their time and finances are not tied up with simply meeting legal requirements.

One important point to consider is that more regulation comes into force in 2018, including the General Data Protection Regulation.

Failing to comply with the new data regulations will carry heavy fines and could see firms enter insolvency or crash out of business entirely in the worst cases.

Firms also need to consider whether to invest in technology as while it can be a substantial outlay, it can massively boost working speed and productivity.

It’s also key to invest at the right time, as delaying the process may slow growth and reduce effectiveness in the long term. Meanwhile investing too early can place a business under unnecessary financial pressure.

For those operating on tight margins, they may be restricted in what approaches they can take, while those keen to expand should consider options reviews to find how best to move forwards.

By assessing the current situation with the use of relevant financial information, it’s possible to streamline business processes and cut preventable outlays.


By Phil Smith


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