There is no doubt that SMEs have felt the brunt of economic instability in the UK but, in the first of its quarterly risk indexes, Zurich found 84 per cent of SMEs are concerned about the UK’s economy, remaining unconfident that the situation will improve over the next quarter, one in ten even felt tempted to close their business as a result. Whilst we would all like to hope for a full recovery, the continuous dips since 2008 mark the need for us to start telling a different story. Today, SMEs must adapt to the ‘new norm’; accepting the constraints of the economy, taking stock of inherent challenges and adjusting their businesses strategy accordingly.
Despite the concern amongst SMEs, which seems to consistently dominate our headlines, Zurich also found that in fact a large proportion were expecting to grow – something SAP itself reported last month, citing 96% of SMEs are looking to grow their business with 48% expecting to grow by 10% year-on-year. As crucial contributors to our economy, it’s important that this mindset is not lost amongst doom and gloom stories.
The way that SMEs invest to achieve growth is crucial, they need to ensure that they spend wisely in key areas which will have maximum impact on their business. Finding new ways to be innovative is high on the agenda for those seeking to grow and diversify offerings, for example entering new export markets to increase their customer base. Let’s not forget that the very nature of being a small or medium-sized enterprise is that their agility enables faster decisions, in comparison to large businesses constrained by corporate red tape. Facilitating more innovative ways of working, be it through establishing processes to manage money and cash flow more effectively, or investing in new technology to provide an accurate overview of the business and remove the need for making ‘gut feel’ decisions, all contribute to the ‘new norm’ mindset.
SMEs I have worked with are all of the opinion that they must lead their businesses to success despite the challenges they have faced over the past five years. By maintaining this positive outlook they will continue on their growth course despite a volatile economy, and competitors will have no choice but to follow suit.