Small firms confident of overcoming 2018 challenges
Small business owners remain confident in their ability to do business in the UK, despite the plethora of challenges they currently face, new research shows.
Late payments, uncertainty surrounding Brexit, the inconsistent value of the pound and wider economic issues are all viewed as potentially damaging to growth.
The study, commissioned by the Small Business Research Centre and analytics firm Dun and Bradstreet, revealed that 54% of SMEs are confident of future success.
This comes despite a third of managers revealing a dip in confidence as a direct result of Brexit, while 35% also cancelled plans for expansion as a result.
Meanwhile 34% suggested they had studied the economic environment as they have reworked their business plan to account for the uncertain nature of Brexit negotiations.
More than a quarter of businesses deemed the current late payment crisis as being a major hurdle to overcome, with 11% of SME owners stating they were owed between £100,000 and £250,000.
On average, firms were owned nearly £64,000 and this has had a knock-on effect on their operations, with 35% pointing to continual cash flow difficulties.
This means they are facing an increased threat of insolvency and that they could be forced into administration should the situation not improve.
While some owners and managers said they had dropped into their personal finances to cover any shortfalls, 29% said they had been forced to delay payments to suppliers until invoices were paid.
Late payments are seemingly a growing issue too, as 51% said the situation is worse now than it was three years ago.
Some 58% even suggested that the longevity of their business is thrown into doubt by late payments, as many can simply not sustain their position given the lack of finance.
Seven in ten SME owners said they have a clear business strategy while three quarters revealed they were confident of achieving financial growth during the next five years.
Those that are less sure of their futures may want to develop contingency plans to cover for any eventuality, as this should ensure they have a number of strategies to consider should something go wrong.
By Phil Smith