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Small businesses can enhance their chances of success
9th January 2020
It was fantastic to see that this year’s Small Business Saturday was a record-breaking success, with an estimated 17.6 million shoppers hitting their local high street on the day.
The annual UK-wide event has evolved into a superb showcase of the tremendous role that small businesses play in the fabric of our communities, as well as the huge contribution they make to the UK’s economy.
Because of the nature of the businesses, Small and Medium-sized Enterprises (SMEs) can sometimes face some unique challenges which leave them as close to a bumper year as they do insolvency, unlike their larger counterparts.
Walking that tightrope means that a worrying number of smaller firms collapse.
Yet, the levels of difficulties - and failures - that these companies face need not be so high. Safeguards can be put in place to help people help themselves.
Planning is the key to resilience. By taking the time to put in place a string of simple measures, businesses can greatly increase their chances of survival should a disaster strike.
The top tips to enhance the chances of success for any small business are straightforward.
Tackle debt recovery. Reduce the risk of disputes, late payments and debt collection causing catastrophic problems by putting in place strong payment terms and conditions and debt collection procedures to stop problems escalating.
Plan for the future. Small businesses started by one or two people of a similar age often run into problems when these people want to exit and can lead to the end of a business. Succession planning - setting a course of how a business will continue when people move on, or changes are unexpectedly forced on the business as a result of death or long term illness - is easier when done earlier and can stop an enterprise from disappearing.
Stay on top of compliance. A major event such as a fire or the discovery of asbestos can spell the end for a small business with physical premises. But if simple risk assessments are undertaken at the outset - and properly monitored - a catastrophic event need not spell the end. A breach of fire safety regulations, for example, can have tragic consequences and could end up costing tens - or even hundreds - of thousands of pounds in court fines and invalidated insurance, as well as damage to reputation and lost productivity.
Understand GDPR. New European data protection regulations have not yet had time to take their full effect, but the penalties for contravening GDPR are punitive, and in the case of small businesses, the penalty for a serious breach could be enough to submerge it. Knowing the law and putting in place appropriate procedures before something goes wrong is imperative.
Of course, as with anything in life, better planning doesn’t necessarily mean things won’t or can’t go wrong. But, what we do know, is that this puts businesses on a firm footing for the future.
SME’s are encouraged to undertake simple and effective planning and seek legal advice early should problems arise.