Is cash flow a more pressing concern than Brexit for many SMEs?
A recent report has revealed the most significant barriers to business growth, with the top results revealing the most pressing being the reliability of cash flow, followed by the challenges faced when recruiting skilled personnel. Surprisingly, down at the bottom of the list is Brexit, cited as a barrier to business growth by only 5% of entrepreneurs.
For these businesses, removing the primary concern would impact significantly on achievable growth for the future. Respondents predicted growth would be between 16% and 30% – with 21% of entrepreneurs stating that they felt their business would achieve in excess of 30% growth.
Additionally, the availability of access to funds for investment in business was another concern for entrepreneurs. This further borrowing can facilitate growth and maintain healthy cash flow, however, it must be noted that maintaining the flow of income and expenditure internally can reduce the necessity to borrow large amounts. Other factors included red tape, which interestingly only 2% of those questioned believed is a barrier to business growth.
Further to this, the respondents cited that, although red tape was and regulation were not an impending threat to growth, 47% agreed the significant cost not only drained capital resource, but hindered opportunity as a barrier to innovation.
Chief Executive of the Entrepreneurs Forum, Gillian Marshall, has said: “While Brexit remains an evolving challenge on the horizon, entrepreneurs are more focused on the issues that are affecting their businesses in the here and now.
“Cash is king for entrepreneurs and without it the wheels of business turn a lot slower and can put their enterprises at risk. This will include the perennial issue of late payment, which can have a major impact throughout the economy. If small suppliers are not paid they could go out of business, which can also impact on larger firms too.”
Ensuring the success of your business by safeguarding against late payment can help eliminate the threat of inconsistent cash flow, which in turn can assist with overall growth. This may not be as hard as it seems, as implementing a reliable credit control procedure can be the solution. Read our A-Z of credit control best practice here.
What do you think is the biggest threat to your business? Brexit, unreliable cash flow, or something else? Let us know in the comments section below.