Despite signs of economic recovery, recent uncertainty is causing slow growth rates for independent businesses and small and medium-sized businesses (SMEs). However, there are strategies that businesses can implement to protect themselves.
What are the key things that you need to know?
Cushioning the impact
Need guidance for growth planning? The following strategies can help SMEs achieve consistent growth trajectory, even when there is economic uncertainty or a slowdown:
- The value of skills – Thriving businesses invest in the right human capital, including transferrable and industry-specific skills. The rise in jobs created by SMEs indicates ongoing investment even amidst slowed growth.
- Diversification – If your core products or services are experiencing low demand, it may be worthwhile expanding your portfolio. This not only opens doors to new customer segments but also helps to minimise risk.
- Market research – Recognising market and consumer trends can refine your product or service positioning and marketing strategy in relation to your competitor brands.
- Financial planning & budgeting – A solid plan and budget is a must-have, show you where to invest the most capital and where you can cut costs.
Steering clear of roadblocks
Being proactive and prioritising growth are excellent strategies for achieving sustained growth.
However, there are still some key pitfalls that you need to account for when developing and actioning your business plan:
- Overextension – You should avoid taking on more work or launching more products than you can manage. Before launching a new avenue of business, you should carefully review your team’s workload and your current financial situation.
- Debt mismanagement – Some debt may actually be a good indicator of growth, such as business loans. However, loans with high interest rates or taking on too much debt can harm your overall cash flow.
- Overlooking customer relationships – For cost-effective and stable income management, don’t forget to nurture your relationships with existing customers.
- Poor cash flow – Even with paper profitability, you might struggle to meet operational expenses during periods of rapid growth. Before targeting further growth, make sure that you have sufficient cash flow and can meet your expenses comfortably.
Protecting your finances
For the advice that you need to achieve sustainable growth without shouldering a heavy financial burden, we recommend speaking to a professional accountant.
They will be able to guide you through your business finances, identify areas of savings and those that need more investment, and advise you over debt.
Our team specialises in financial advice for businesses, supporting SMEs through periods of growth during uncertain times.
For help safeguarding your business against sluggish growth, please don’t hesitate to reach out to our team today.