The continued uncertainty over Brexit continues to hit British businesses in a variety of ways. In 2016, SMEs and start-ups were responsible for almost half of all private sector turnover. However, recent research indicates both that many companies ended the year in financial distress, and that there is a lack of optimism about the current year.
A Rise in Financial Distress
A report published by Begbies Traynor showed that over 275,000 companies – the majority of which were SMEs – demonstrated signs of “significant financial distress” at the end of last year.
Julie Palmer, a partner at Begbies Traynor, said: “With the World Bank revising down its growth forecasts for the UK, alongside reports that the UK’s trade deficit widened to a worse-than-expected £12.2bn in November, our data shows that levels of financial distress continue to rise across the country, most of all within the UK’s important SME community, which is widely regarded as the lifeblood of the economy.”
This appears to be backed up by the findings of a survey of 1,200 companies (a mix of SMEs and larger businesses operating in both the public and private sectors) conducted by network provider O2, which found that less than half – just 46% – predicted that 2017 would be better than 2016.
Measures Needed to Support Business Growth
The O2 survey revealed that SMEs want the government to make pro-business measures a priority, to help support business growth. The main areas of focus were identified as being a reduction in red tape, improved access to technology and connectivity, increased access to funding, improved access to talent/training, and improved trade agreements.
There’s no doubt that all of those things would help, as would more certainty on the economy, a better picture of what Brexit will look like, and some certainty on the possibility of a second referendum on Scottish independence. However, while there are many issues undoubtedly out of the hands of SMEs, it’s important not to sit back and wait for others to take action.
Happily, there are positive steps that all businesses can take to ensure they are on a steadier footing for the challenges ahead.
First and foremost, process efficiencies, leading to savings in both time and money, should be investigated and implemented. Next, steps should be taken to both boost and protect cashflow.
Protect Business Cashflow with Direct Debit
One of the easiest ways to achieve both of those measures is to arrange Direct Debit payment services for your customers. It’s a measure of control you can impose on a fluctuating landscape, to help you manage your business, its cashflow and its overall financial fortunes.
Arranging for a Direct Debit bureau to handle everything for you is a very straightforward process, and the ideal solution for many businesses. London and Zurich are specialists when it comes to managing safe, secure payments by Direct Debit, offering a range of services backed up by expert advice. By leveraging our business skills, you can direct yours to doing what you do best: running your business. And as cashflow is the lifeblood of every business, knowing what to expect and when allows for more confident business planning.
If you’re struggling with Brexit uncertainty and would like to bring clarity and consistency to your business payment processing, speak to our expert consultants today on 0121 234 7999. We’ll tailor a solution that’s perfect for you.