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SME’s and the problem with productivity

Small and medium-sized enterprises (SME’s) have a huge role to play within the UK economy. Forecasts predict that they will contribute over £217bn to the nation’s pot by 2020.

Despite this, productivity in the UK is still a problem as it currently sits at an all-time low. Improving and maintaining productivity is a challenge for many businesses but it can be particularly difficult for SME’s.

Here we offer our take on three key issues which can harm productivity and hinder a business’s potential:

SME’s need facilities

‘Facilities’ often refers to either the funds required to establish a business, or the facilities that dictate how a business operates.

Securing funding can be a sticking point for start-ups and scale-ups, as banks are not always so keen to lend. If funds are inaccessible, then businesses don’t have the freedom to innovate and growth can plateau. Businesses should be aware of alternative methods of funding too as traditional bank loans are not the only option. However, you must do your research; rushing into an agreement that delivers short-term gain but isn’t right in the long-term could harm your business.

In terms of the facilities within a workplace, productivity is suffering largely because of technology-related issues. Poor connectivity and technology not functioning as it should can be detrimental to an efficient workplace. Pursuing repairs or fixing issues themselves means business owners are wasting time on tasks that aren’t focussed on profitability. Again, awareness is essential – business owners can benefit from working with contracted companies that take care of IT issues and equipment. Businesses should also consider investing in new equipment or updating software; there are still generous tax incentives in place for capital expenditure so now is as good a time as ever.

Hours spent on administration

Countless hours spent on administration impacts directly upon productivity and SME’s often fall victim to this.

We know that managing your finances and keeping an eye on cash flow can be difficult, especially when your business begins to expand. Yet, without these things your business cannot continue to operate and be successful. Freeing up time to focus on driving the business forward should be a priority for all business owners. Seeking assistance from professionals, including the outsourcing of activity such as payroll and bookkeeping can often be the perfect solution.

We work with start-ups and small businesses every day, giving them the support they need to succeed in running their business. We can take care of your accounting and outsourcing needs, giving you more time to grow your business.

Uncertainty for SME’s

With Brexit on the horizon and the nation still reeling from the general election, some businesses face a prolonged period of uncertainty. Businesses should focus on improving productivity and strive for growth but research suggests that this isn’t the case.

With uncertainty here to stay whilst Brexit negotiations are ongoing, businesses must not give up. Seize new opportunities, innovate, energise your workforce and ensure your finances are in order as you move forward.

It is not only the responsibility of business owners to cultivate confidence, but also that of local councils and national government.

For example, measures were announced at the Spring Budget to help vulnerable businesses cope with changes to business rates. Yet, at time of writing, many businesses are still waiting for bills to be correctly adjusted.

Failure to fulfil promises does little to quash doubt, inspire confidence or offer hope for the future. That is why local councils and the government must consider how they can support the business community during this time.

How can we help…

Here at George Hay, with a large proportion of our client base made up of small, local businesses, we understand the issues facing these firms. We are on hand all year round to ensure you’re always up to date on the latest legislation and aware of the tax-saving opportunities available to you. We work across all industry sectors to provide comprehensive audit, accountancy, taxation and business advisory services, tailored to the requirements of your business. If you’d like to find out more about how we can help you visit our website www.georgehay.co.uk

You can also find an extended version of this blog on the UK200 website.  

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