Spend money to make money – could a strong commitment to investment be the key to future profits?
For businesses who may be struggling, there is a conventional school of thought that the only option available is to keep a tight hold on expenditure and hope the sector picks up.
However, such an attitude is a probably a little outdated and may be a recipe for gradual but unstoppable decline. In contrast, the idea of seeking and committing to further investment in order to get the company back on a sound footing could be a bold new option.
However, it is the type of endeavor which is increasingly being rewarded in modern society. This is effectively exemplified by the announcement this week that 102 companies have been named in the latest round of the government’s Regional Growth Fund (RGF).
The companies selected will be able to take advantage of a £506 million pot of investment funding that will allow them to expand their operations and create new jobs. The government is obviously hoping that the subsequent growth of these companies will have a positive impact on the economy.
Vince Cable recently referenced “over 2,600 SMEs” who have already been helped by the scheme, which highlights the widespread effect which it has had.
The scheme is a great example of what assistance is available to SMEs who may be struggling at the moment but possess the drive and ambition to turn their business around.
Business rescue plans may often involve a highly structured and strict attitude towards outgoings in the immediate future. However, there is help out there for SMEs who are keen to get on a sound financial footing and potentially expand in the future.
It is certainly a brave move to commit to further investment but it could reap significant dividends if such a strategy leads to the company turning their situation around.
A restructuring and insolvency advice service can assist business leaders, financial directors and stakeholders to deliver pro-active solutions for their business. They can also offer specialist help for creditors in establishing financial solutions when a business is placed into administration.
By Phil Smith