By Richard Taylor, Partner, DTE Business Advisers
Its not easy for SMEs, with increased red tape and many decisions to make on how best to grow your business, there can be a lot to keep you awake at night. Richard Taylor, partner at DTE Business Advisers has compiled his top ten of the current most pressing issues for SMEs, and advises that with the correct professional support, all can be managed or overcome.
1. Regulation and Overregulation
Businesses are becoming increasingly regulated and those regulations continue to change. Employment legislation is becoming more and more complex. Auto enrolment and Real Time Information are just two recent examples of new legislation that are having wide ranging implications for our SMEs.
2. Cash flow and bad debts
Cash flow is key to any successful business and managing it is therefore vital. It’s important to ensure that customers pay and pay on time. Credit searches should be undertaken on new customers to ensure that they have good payment records. Equally business costs needs to be managed efficiently to ensure that optimal amounts of cash are retained in the business.
As technology continues to become more complex, IT becomes more of an issue. Should a business maintain a traditional server solution or move to the cloud. It’s becoming a more popular option for businesses, especially since it allows you to concentrate on your core business.
4. Banking relations and access to funding
Access to funding has always been a key issue for businesses, however over the last few years it has become increasingly difficult for many to access the funding they need to move forward and grow.
5. H M Revenue & Customs
HMRC is becoming more aggressive in it quest to recover taxes. In recent years penalty regimes have also become more draconian and are having an impact on unsuspecting businesses. In addition Time to Pay arrangements, which were introduced by the previous government to help businesses with temporary cash flow issues, are becoming more difficult to access. It is therefore important to ensure that any proposals made to HMRC are robust.
6. Economic Volatility
As continued good news is seen in the press then volatility in the economy tends to reduce. However, until people start to feel that the recession is long behind them, then businesses struggle to know what to do for the best.
7. Increasing Interest Rates
Interest rates have now been at a historical low for a number of years. It is expected that this will not remain the case. The markets are expecting a first interest rate rise to happen in early 2015 but of course it could be earlier. Do you nee to consider how you would service existing debt levels if the rate were to increase?
The dilemma for SMEs is that they know they must continue to grow. To do that, they must invest. However with the banks are reluctant to support businesses in case the recovery slows down.
9. Business Strategy
With high levels of economic uncertainty in the UK and abroad, businesses tend to have a short term focus, which means they are shying away from undertaking long term planning. They can destroy value by no properly planning for the long term and it’s important that they find a balance between reactive short term decision making and long term strategies.
Businesses must employ good staff to grow. As levels of unemployment decrease its is becoming increasingly difficult to access affordable quality skilled staff.