A recent survey reveals that growth is the main intention for business owners, however, some SMEs are finding there is a significant gap between their ambition and their reality. Here’s how external funding can help boost growth prospects.
According to the Federation of Small Businesses, SMEs account for 99.3% of businesses in the private sector and, with a combined annual turnover of £1.9 trillion, they account for 51% of the sector’s turnover in the UK. So, what are their plans and ambitions for the coming month?
It seems growth is front and centre – with the same survey showing that 43% of business owners intend to increase head count in 2018. Of those, 32% said that hoped to recruit four or more employees within the year, which clearly demonstrates an ambition to scale up their operations.
A confident outlook
UK workspace provider Flexspace found a similar trend in their Business Sentiment Survey, which gathered the opinions of over 150 SME owners:
78% expect their confidence in the UK economy to increase or remain the same for the remainder of 2018.
This optimistic outlook might come as some surprise in light of the current uncertainty that surrounds productivity, the UK’s economy and a shifting global landscape. However, small businesses seem to be feeling positive and are setting out their plans for growth.
Setting out to succeed
SMEs looking to secure growth in the next 12 months will need to identify and take advantage of new routes to market, ways to stand out from their competitors and – perhaps most importantly – new ways to secure the funding they need to recruit staff and scale-up their operations.
But while a large proportion of business leaders are expressing a desire to grow, only a small handful of SMEs actually realise their ambitions. According to the Federation of Small Businesses report, 81% of SMEs have moderate or substantive growth ambition, however, during the past three years a higher proportion of SMEs have seen their employment decrease (27%), rather than increase (19%).
Achieving SME ambitions
An SME’s ability to scale depends on their ability to access the right funding – and this means small business and start-up owners should investigate all external finance options available to them. Invoice finance providers can provide the source of alternative funding that is needed to enable a SME’s expansion plans by bridging the gap between invoicing and receiving payment.
At Global Asset Finance Limited and partners we offer selective invoice finance, which means that – compared to some other invoice finance providers – you can pick and choose the invoices you’d like to have advanced. So, depending on your business needs at any given time, you have the flexibility to adjust your cashflow position by selling single invoices or selecting a few at a time.
In addition, Global Asset Finance Limited is perfect for SMEs who wish to use external finance as a cash buffer, as there are no contractual obligations or hidden fees.
Releasing money owed to you can help set your business on the path to expansion.