We’ve all seen some of the frightening statistics about SME survival rates. Every so often the numbers resurface and we wonder how it can be that 57% of new businesses in the UK fail within five years.
According to a report from The Entrepreneurs Network, the answer could lie in the pressure placed on startups to deliver fast, scalable profits. This, the report argues, is not just a poor indicator of success, but a dangerous strategy that, in fact, makes it harder for businesses to grow sustainably. I couldn’t agree more.
When there is pressure to ‘scale up’ quickly, small businesses risk running before they can walk. It's perhaps indicative of this that 4.9 million small business owners are reportedly overwhelmed by financial regulations and 75% say they had never submitted a tax return prior to starting their business. Building a business with a solid foundation and long-term stability requires financial understanding, and gaps in their knowledge could be holding SMEs back.
Ingraining basic financial training in UK entrepreneurs is crucial to their own financial security and wellbeing. A thriving small business sector could prove beneficial to the country's economy, too. I believe it's in the best interests of all businesses involved in finance, whether accountants or Enforcement Agents, to reach out to small businesses and lay these foundations with them. Industry and government bodies, too, should question whether they are effectively supporting businesses in need of help with finance and accounting matters.
Reliable cash flow
Media and advertising campaigns could be powerful tools in addressing gaps in our knowledge and teaching some of the financial basics of setting up your own business and even managing cash flow. The government and the FSB have worked hard to introduce new measures to protect SMEs, but small businesses owners must be encouraged to use existing tools too.
A greater focus on good financial practice in the media could perhaps dispel myths about the work of Enforcement Agencies, too. We work with small businesses to ensure they can recoup late or unpaid invoices in a fast, efficient and sensitive manner.
Tools and partnerships
I often talk of the benefits of new technologies in the financial sector, especially in areas such as automated invoicing and next-gen payments. While I believe these can have a significant impact in making payment collecting simpler and more effective, it's also fair to say that digital tools can only go so far.
That is why creating working partnerships with financial experts is a crucial, and yet under-recognised, path to success. Enforcement Agents like Dukes have in-depth knowledge of legal matters around debt, and are experienced in handling unpaid invoices of all shapes and sizes. This expertise can help to ensure money is recouped without ruffling feathers, and before it has an impact on the bottom line – that’s real added value for struggling small businesses.
Many thanks for viewing my post, I hope you found it useful?
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