As some semblance of ‘normality’ begins to return post-pandemic, SMEs priorities are shifting in line with this. This is according to research conducted by the UK200 Group and its members, of which we are one, in April 2021.
When surveyed in September 2020, survival and increasing operational efficiency were top priorities for SMEs. In comparison, survival has now been replaced with a focus on looking after existing clients, generating new business and growth.
Whilst this is true of most business structures, there is a notable difference in the non-profit sector, whose focus is instead on reducing overheads.
SMEs priorities: Business development & growth
Toni Hunter, George Hay, comments:
It’s encouraging to observe that many SMEs feel that they are again in a position to pursue business development activities and that growth is back on the agenda.
When speaking to our own clients, many are more optimistic about the future than they were this time last year.
For those SMEs that have survived the pandemic, there is very much a ‘if we can get through this, we can get through anything’ attitude prevailing. Though, it is clear that those larger organisations are a little more upbeat than those on the smaller side with less resource at their disposal.
Maintaining an optimistic outlook is going to be key, I believe, to recovering and rebuilding. Business-owners should use this drive and enthusiasm to get things done!
That being said, the consequences of the pandemic have been varied. As an adviser to a number of charities, for example, I have seen the impact that Covid-19 has had on an already financially challenged sector.
Making their money go further and watching every penny has really become even more crucial in the last 12 months. It is no surprise that ‘reducing overheads’ ranks as highly as it does for the non-profit sector.
As chartered accountants and business advisers, our job is to understand what each of our clients needs from us going forward; dedicated support to get their finances back on track, help with scaling their operation, or just to be a trusted partner on the road to recovery.”
SME Outlook Tracker – Key findings
The results of the latest UK200 Group SME Outlook Tracker – April 2021, turned up a number of other key findings:
- 42% of respondents projected an increase in income levels over the next 12 months
- 79% of businesses are not planning any major changes in the coming year
- 64% of respondents have reviewed cashflow, in a bid to futureproof their business
- less than 50% of businesses have thought about staffing or how technology could help long-term
Futureproofing your business
Colin Airey, Partner at George Hay, comments:
It’s good news that almost two thirds of those surveyed say that they’ve actively reviewed their cash flow. However, that also means that a third haven’t.
If business-owners are anticipating increased income, then regular reviews are going to become even more imperative, to ensure that funds are being utilised sensibly within the business.
Furthermore, as the research suggests, good cash flow management on its own is not enough to futureproof your business; there are other things to consider too.
It is particularly concerning that less than half of SMEs responding to the survey have considered the impact of staffing and technology on their business in the long-term.
With the trend towards digitisation, embracing technology could give rise to new efficiencies and improved productivity, helping you to bounce back with more verve than you might otherwise do.
Futureproofing your business effectively now, could help you to protect what you’ve worked so hard for. This is crucial, should we experience another unprecedented economic crisis in our lifetimes.”
How can George Hay help?
Running a business can feel a bit like spinning plates, with various competing priorities. This is true whether in the midst of a pandemic or not.
What’s important is to understand your current position, to know where you’re going and how to get there.
We work with hundreds of SMEs, in our capacity as chartered accountants and business advisers. We understand the challenges that you face.
We’ve helped hundreds of businesses to improve their cash flow management with proactive planning, realistic strategies, and the use of cloud accounting software, as well as with sound advisory support in the way of management accounting, for example.