The outlook is bright for SMEs in the UK, but entrepreneurs need to remember that their own pride and stubbornness can severely restrict their companies' growth prospects.
Official statistics tell us there were 4.9 million businesses operating in the UK in 2013, with 99 per cent of these classed as small and medium-sized enterprises.
All in all, SMEs employed just shy of 14.5 million people last year, so its really no surprise that the government constantly refers to these companies as the backbone of the UK economy. With the outlook continuing to brighten for British entrepreneurs, it is highly likely that a growing number of startups will enter the fray in the coming years.
Why do so many small companies fail?
Speaking to the Guardian earlier this year, renowned entrepreneur Theo Paphitis said that as many as 50 per cent of small businesses fail in the first couple of years. This, he stated, is because budding entrepreneurs are not adequately prepared for the trials and tribulations that business ownership brings.
Many of these enterprises can not only be salvaged, but can go on to become thriving corporations, but only if the owner is willing to listen to others and accept help.
Share the burden
Even with the economy looking far stronger than in previous years, the odds are still stacked against startup companies in many ways.
Competition is intense and youll find that larger firms higher up the food chain might try to take advantage of your lowly status. Indeed, research conducted by Bacs Payment Schemes earlier this year showed that British companies are owed a total of £46.1 billion in late payments, with SMEs carrying an incredible £39.4 billion of this burden. If nothing else, this shows how hard it can be for startups to get their finances in order.
Its only natural that startup owners want to maintain complete control over their organisation, but this can be counterproductive. However, you simply cannot afford to be too proud to accept help from others.
You might have incredible ideas and a solid business plan, but perhaps finances arent your strong suit. Thats why more UK firms are outsourcing accountancy tasks to third party specialists - a trend that is likely to grow in the coming months. In doing so, you can ensure that your beloved business wont be jeopardised by a hefty VAT bill that you have forgotten to pay.
Theres so much to think about when you build a business from scratch, so its easy to let important things like this slip through the net. That said, inexperienced entrepreneurs cannot use their own naivety to worm their way out of a HMRC bill. It simply wont wash.
Its not just tax bills that startups need help with. The Bacs Payment Schemes research demonstrates how difficult it is to maintain healthy cash flow, so firms need somebody who will keep on top of this for them. You cant do everything. While youre out pitching for new contracts and presenting your clever ideas, its important to know you have somebody trustworthy behind the scenes ensuring that you have the necessary funds to execute your plans. After all, as the old saying goes; speculate to accumulate
Dont let stubbornness hold you back
The government has high hopes for Britains SMEs in the coming years, but as weve already established, it could be entrepreneurs own stubbornness and reluctance to outsource certain tasks that proves to be their undoing in the long run.
As we cannot be experts in every relevant subject, we would love to receive 'guest' articles that may be of interest to anyone running their own business or thinking of doing so. ADD YOUR ARTICLE
