How to strengthen your SME against economic challenges

 Political shake-ups such as the recent change of Government can cause uncertainty for small and medium-sized enterprises (SMEs). 

This is due to potential changes in economic policies, funding and grants, and even a change in consumer spending.   

According to a new report from Virgin StartUp, half of all small business owners are now worried that their business might not make it through the next year.  

This is a big jump from just 11 per cent who felt this way back in November. 

Facing the crisis head-on 

Virgin StartUp’s ‘Founder Barometer’ report shows that SME owners are facing several big issues: 

• Confidence about financial futures has dropped from 66 per cent to 45 per cent since last November. 

• Many are asking for the end of business rates and more support outside of London. There’s also a push to cut Corporation Tax and raise the VAT threshold. 

• Worries about living costs, which have become the top concern for more than half of the SME owners, a significant increase from last autumn. 

Plan for stability 

Even with these worries, there are ways to keep your SME steady.  

Taking a close look at your finances can give you a better idea of where your business stands and what might come next. 

Look for places where you can cut costs without sacrificing the quality of what you offer. 

In addition, to this try to get better payment terms from suppliers and offer deals to customers who pay early. 

Stay updated on any Government schemes that could help your business, and don’t forget about tax breaks like R&D tax credits. 

Prioritising your team 

A happy team means better productivity and morale. 

Build support networks to help your team connect with people outside the business. 

Boost mental health support by making sure your team has access to mental health resources like counselling and days off for mental health. 

Innovating and diversifying 

Good businesses never stop evolving, and nearly 40 per cent of SME leaders are planning to add new products or services, so it is crucial to always be on the lookout for new opportunities. 

Look into different ways to fund your growth, whether it’s venture capital or other financing options. 

Looking forward 

Despite the tough environment, many SME owners are still planning to grow in the next six months.  

If you need personalised financial advice to help manage your SME through these tricky times, our team of experienced advisors is here to help.  

Contact us today to see how we can support your business.