Coping with the cocktail of issues facing SMEs

 
Katherine Denham
Stressed Out Workers
Source: Getty

Any small company will know that getting their business going can feel like an uphill battle, and there are concerns it’s about to get harder for the SME community.

But this is where the small business commissioner comes in. The hunt began in February this year, and the government is set to reveal who will take the helm in October.

Whoever is appointed to the role faces a barrage of challenges to try to tackle issues affecting small and medium sized enterprises – the biggest being the late payment problem.

Debt dilemma

Figures from insurer Zurich, published earlier this month, found that SMEs are owed £16,250 on average from other businesses, with more than half of late payments to small businesses coming from firms larger than their own.

Peter Alderson, managing director of LDF, stresses how crucial it is for small business owners to be given certainty in payment timing and practice.

“While there is no doubt that the new commissioner will offer real benefit for smaller businesses by ensuring the issue of delayed payment is taken more seriously, we need a speedy resolution and less red tape.”

Navigating the minefield

This regulatory minefield also serves as a big headache for the 5.5m small companies in the UK, with many businesses finding compliance a costly endeavour.

“Staying ahead of the rules is essential, but resourcing this is a challenge for many business owners,” Alderson says.

In fact, according to the World Economic Forum, the UK sits in 25th place in the world when it comes to the ease of dealing with regulation.

And with the raft of new rules set to come into force next year, including the General Data Protection Regulation (GDPR), businesses will have an even bigger task on their hands to make sure they comply.

Crippling outlay

“Preparation and timely adjustment are key,” Alderson says. “Investment in technology where required may be a consideration, and cost can be spread to reduce capital cost.”

The LDF boss admits that investing in technology itself can be a “crippling outlay”, but adds: “it’s often a sensible decision to make in order to increase effectiveness, productivity and speed.

“Avoiding or delaying investment may save a business money in the short term, but cost it money in restrictions and reduced effectiveness in the long term.”

Having the digital infrastructure in place also means you and your team are not wasting time resolving issues with outdated IT and leaves you less exposed to cyber attacks.

Costly problems

Opting for business finance has become a standard practice among SMEs, and while there’s no doubt that this can go a long way to alleviate some of the issues, more needs to be done to help deal with the fresh mass of costly problems coming their way.

Having a commissioner in place who can fight on behalf of SMEs is a good start.

Bottom of the league

Perhaps the big worry is that the growth of small UK businesses now trails behind our European neighbours, according to a global study from insurer Hiscox.

If the UK is going to compete in a challenging post-Brexit world, we all need to do our bit to make our lives easier – tackling these glaring issues is a step in the right direction.