The 2017 Autumn Budget announced more investment in research and development for
technology businesses, and over a billion for improved infrastructure and transport, but very little to support small businesses like retailers and restaurants.
The recession is officially over, but the climate is still tough for small businesses and SMEs.
For that reason, many are looking to alternative finance options to expand and grow, rather than traditional routes. If you’re hesitating, here’s why your business will struggle to grow without an injection of funds.
1. Most businesses don’t have the spare income to make their plans a reality.
When rent, staff costs, accounting, stock, and equipment are all considered, it’s no wonder so many small businesses struggle to fund the ‘nice to haves’. Your usual operational costs are essentials, but growth demands some extra investment.
Keeping cash flow healthy is a major priority for British small business owners, with 70% admitting it’s the biggest problem they face. This doesn’t leave much room for disposable income, so businesses need to find alternative ways to secure it.
2. Your competition is likely to be seeking investment, even if you aren’t.
No one really knows exactly what their rivals are up to, but 60% of SMEs have been looking into extra funding for their business for the last three years. If you’re one of the 40% that isn’t, you could find your business falling behind. If the pub or bar down the road puts thousands into refurbishment and developing their menu, your pub or bar could struggle to compete. And if a retailer selling similar stock has the budget to set up an online store with next day delivery, that could really spell trouble if you can’t match it.
3. It takes money to make money.
The equipment and assets you need to grow certainly don’t come free, but that doesn’t mean they’re not worth it. The Harvard Business Review cited some recent examples of major companies and entrepreneurs that invest in themselves regularly.
Amazon put a huge amount of investment into developing same-day delivery because they knew their rivals were focusing on it. They couldn’t stand still on something that would be so important to their customers. And it’s not uncommon to see the CEO of Singapore-based agricultural business Olam International if you go for an interview with them. Sunny Verghese likes to be involved in all employment decisions and “insisted on interviewing all hires…in a company of 23,000 people”. No matter what their size, every business should invest time and money in whatever will propel it forwards.
4. Your industry won’t stand still
Customer needs change, and it’s up to businesses to predict and meet those needs. Before
buying online became the norm, businesses didn’t necessarily need an online presence, but the world has undoubtedly changed. As long as you’re aware of the changes taking place in your sector, and what your current and future customer base needs from you, you’ll stay ahead of the game.
Securing funding for your business is a lot quicker and easier than you might think. With average monthly turnover. Repayment is flexible and only paid as your business earns.
