By Janita Kapoor
SMEs have been operating in crisis mode since the pandemic began, focused solely on the steps they can take to stay afloat in the short term. An SME’s performance is found to be significantly and positively correlated to economic anxiety levels and currently their greatest concerns is cash flow and labour shortage.
It is safe to say that there is a cautious approach to external business finance, especially for small and medium sized companies. The lack of confidence is perhaps due to Brexit uncertainty or the fact that commercial loans are perceived to be a last-ditch effort to save a business and something to be avoided at all costs.More than one in four UK small businesses are facing cashflow issues. Not only has this been driven by the economic collapse caused by Covid-19 but also the frequent chasing for late payments.What’s in store for our SMEs this year? – Elite Business (elitebusinessmagazine.co.uk)
Cashflow keeping business leaders awake at night as SMEs ‘extremely concerned’ for 2022 – London Business News | Londonlovesbusiness.com
As concerns mount over the future of the economy and its effect on their business, four-in-five small business owners say that they do not expect to hire new employees this year.Whilst the rate of inflation stays high, it will continue to have an impact on small business costs.
So how can small businesses minimise the impact of cash flow, rising costs and labour shortage?
There are few ways SME leaders can keep ahead of the storm and stay fully up to date and knowledgeable about their company finances. This includes outsourcing certain functions such as finance and accounting to experts who use accounting software and automated services that will carry out their important daily tasks and help them manage their time and resources more cost-efficiently. These experts also provide advisory services that give SME’s strategic advice and come up with clever ways to save money or boost revenue.
Right now, SME’s may not be too optimistic at the prospect of uncertainty. But using third-party experts, or the aid of helpful business tools, is the best way to take control of their finances and minimize its effects.