Top tips for SMEs looking to make the most of a limited budget
With recent figures from Experian revealing that access to trade credit for SMEs has hit an all-time low (falling from 10% in 2008 to a current figure of 6.1%), SMEs may find themselves increasingly struggling to manage their finances.
While plans to provide £20bn of vital working capital to small companies are set to be included in the Bank of England’s Funding for Lending Scheme (FLS) may give a temporary boost to SMEs, there are a number of ways that small businesses can work to make the most of their limited budgets.
Set a realistic budget
Outlining a realistic budget that includes a number of elements including fixed costs (such as staff wages and utilities), variable costs (such as wages and staff overtime), and non-operational costs (such as taxes) will help to ensure that your business makes the most of the capital it holds.
Make the most of your human resources
If your business has been forced to rein in its spending in the current economic climate, then drawing on the expertise of existing staff to examine how the business can be driven forward, without a large outlay, is invaluable. This could be anything from increasing your company’s social media presence to assessing whether staff can take on additional functions within the company to reduce overheads.
Reassess your spending
Reassessing your spending in all facets of the business from advertising to accounting will enable you to identify if cutbacks can be made in any area, and if the funds can best be directed elsewhere. If you are a member of a small business organisation such as the Federation of Small Businesses (FSB), you may be able to receive a financial health check for your business. You can also seek professional advice on financial restructuring from insolvency practitioners.