I’m acutely aware of the personal and professional challenges faced by small businesses gearing up for growth. Last month Dukes appointed a new Managing Director in Rob Jackson and opened fresh offices in London, giving us a taste of the excitement (and nerves) that come with it. During this process I also noticed that a lot of business advice fails to reflect the reality of running a small business.
Often the focus is on how small businesses must innovate in order to succeed. We’re told that big business fears our ability to innovate, which we can all do with the right mindset thanks to the lack of rigid systems and structures. These are, of course, useful nuggets of advice, and ones we all try to absorb, but they’re not the prerequisite for growth.
SMEs are absolutely capable of trying new business tactics to distinguish themselves from other, especially larger, competitors. At Dukes, we certainly pride ourselves on our sensitive, ethical approach to debt enforcement, and believe it’s an invaluable USP. However, I also believe it’s how you handle your customers, and manage the money they bring, that determines whether you make it to the next level.
We’re fortunate that our business, by its very nature, encourages us to manage our money in a deliberate, structured way. Others aren’t so lucky. A recent survey suggests that 25% of small businesses are owed over £25,000 in unpaid debt. Unsurprisingly, 50% of small businesses say these debts have prevented them from investing in their growth.
While many businesses will look at insurance options to protect themselves, I believe too few spend valuable time building their own protective systems. Simply inserting clauses into contracts and invoices to allow the charging of statutory interest on late payments, and passing the cost of enforcement onto debtors, for example, can reduce the burden of late payment. Systems like financial checks of potential clients and automated invoicing can also prevent clients from accidentally putting your business under pressure.
When it comes to debt and cashflow problems, SMEs should also be aware that they don’t have to solve them alone. Of course we want them to be aware that Dukes are here to help recoup unpaid debts in a sensitive manner, but we aren’t the only ones ready to give UK SMEs a leg up.
The government has recently launched a new fund to support small businesses, an initiative that’s added to a range of support already available. Organisations like the FSB and local authorities can also help you tap into resources, and protect yourself against risks. So don’t neglect those foundations, use them to support your growth and you’ll find yourself much freer to innovate.
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