Recent insolvency figures for the first quarter of 2011 seem testament to this with a 22% increase in Administrations in England and Wales from the last quarter in 2010 across all sectors.
Overall the volume of pressures that UK business has borne are now seen to be taking their toll. With VAT, Inflation, rising cost of commodities and cuts, there are still plenty more to come.
Just this week the Bank of England has downgraded its UK economic growth forecasts for the next year to around 1.75pc.
So what can management teams to avoid becoming a statistic?
In short, achieving growth in SMEs depends on the strength and depth of skills, plus the capabilities of management, across every aspect of the business. Being able to demonstrate those skills to all stakeholders to gain trust and inspire confidence is crucial. Evidence that a business can service any additional funding it takes on is top of the agenda for banks.
Through mastering the following aspects of your business can mean the difference between future growth or financial collapse.
Can your products and services generate enough for a larger enterprise?
Is it time to reassess your unique selling points (USPs)?
How can growth be best achieved in the current market, is this the right time?
Planning and reforecasting
Have you a long term strategy in place of at least two years?
Is there a strategy for growth as well as survival?
Is the current business plan sustainable?
Is there focus on the cost and structure of the business?
Is there a management structure in place?
Is the current team utilised to best effect? Or are new skills required?
Can the structure develop alongside the business?
Is a fresh approach required?
In the current climate it is vital to reassess and adjust the business accordingly; this requires flexibility on the part of the management.
Is there a clear focus on the ultimate objectives?
Are the ‘what if’ scenarios considered?
Is there a succession plan in place?
Financing for the future
Evidence that a business can service any additional funding it takes on is top of the agenda for banks.
Are the current finances robust?
Are current stakeholders and creditors fully up to date with the business plans?
Sarah Batchelor, corporate recovery partner at Baker Tilly Restructuring and Recovery LLP, comments, “Long term planning is easier said then done, especially so if business owner/managers have been focusing on running their business day to day and firefighting cash pressure. Strategy can often be left aside.”