What challenges will SMEs face in 2016?
Money management, cashflow, the wider economy and a shortage of skills have all been identified as some of the main challenges that will face UK SMEs in 2016.
A panel of industry experts discussed the range of challenges that small and medium businesses will have to meet across the coming year in Business Reporter. Other issues mentioned include work-related stress, the uncertainty around the UK’s membership of the EU, cyber-security and the introduction of the National Living Wage for over 25s.
Tony Morgan, chief executive officer with alternative finance provider Versus360, flagged cashflow as a key issue.
He pointed to the fact many larger firms have lengthy payment terms which can place pressures on suppliers to source finance from a complex set of available options. Given that traditional lenders are seemingly struggling to meet demand for business lending, he did add that the emergence of the alternative finance sector was providing a boost to many firms.
According to Lee Perkins, managing director of accountancy software firm Sage UK, suggested that these issues have “throttled growth”. Those struggling to handle their cash flows should seek advice from insolvency practitioners as there might be options available that can help remedy a situation.
The general economic climate is expected to play a key role to the overall success of businesses in the UK. SMEs account for 60% of employment in the UK private sector and almost half of turnover, meaning the challenges facing SMEs are also hugely important to the UK economy as a whole.
Meanwhile a skills shortage in some sectors could also slow growth, while firms with weaker brands may struggle to recruit effectively. Firms need to take decisive action so as to strengthen their position in 2016, as they will need to be noticed if they are to attract highly skilled and motivated individuals.
By Phil Smith
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