There has been a lot of upheaval for businesses in the last year. From the uncertainty around Brexit to the fallout of COVID-19, these are significant events that have financial implications.
As well as these huge challenges, there are some that crop up whatever the current political and financial landscape. In this article, we will discuss what these challenges are for SMEs and what business owners can do to address them. SME stands for small to medium sized enterprise.
What are the challenges?
The big events
SMEs in particular have been hit hard by Brexit and COVID-19. Based on recent research, around 20% of small and medium-sized businesses were set to run out of money as a result of the impact of the pandemic. This, added to the four in 10 businesses not being ready for Brexit, paints a bleak picture for start-ups and mid-sized organisations.
With the coronavirus dominating right now, owners of SMEs have had to act quickly to preserve their business. The furlough scheme, which has recently been extended to October, has been accessed by two-thirds of companies since it was first made available, according to the Office for National Statistics. This has been a lifeline for companies that needed to hold on to staff.
Brexit, meanwhile, has taken a backseat. There are still question marks around how things will look when the transition period is over. Until customs deals are struck, SMEs that rely on international trade will have to wait to see what happens next.
There are other concerns for business owners. These are ongoing issues that crop up at any time, such as ensuring there are key values in place that create the right culture, and that there is a team of skilled, invested employees all pulling together.
Also, what policies and strategies are prepared? For some high-risk sectors, such as construction, there needs to be a robust health and safety policy, and the correct safety procedures must be taken.
Productivity and staff retention are further concerns for all business leaders, but especially those who run SMEs. What benefits are offered to show that staff members are valued? Are there any services around emotional, physical, and financial wellbeing that could help employees and, in turn, foster loyalty from them in the long run?
What are the solutions?
Each business is individual and has specific needs. It might be that one SME is trying to retain staff while another is trying to adapt its strategy for when the pandemic has subsided.
There are several ways to address key issues. For the larger events, such as Brexit and COVID-19, this might mean having talks with contacts from overseas to establish a relationship for when we’ve left the EU and looking to the government for help with furloughing staff.
For other issues, it might require seeking legal advice and getting specialist guidance. All businesses need to follow employment laws, however, there are also areas where specific cover could be required.
For example, a small construction company would need to make sure it is covered in the event of an accident. It would need to make sure the site was operating within the safety requirements and invest in insurance that can be accessed if things go wrong.
Casualty insurance, for instance, is designed to protect a company if a worker seeks compensation after an accident, so speaking to specialists such as Arthur J Gallagher could be the best course of action for the business.
Likewise, an SME that is trying to take a look at its ethos and core values might need to hire a professional to help devise these.
Whatever the issues business owners of small to medium enterprises are facing right now, it is clear that by investing in the right tools and ensuring there is cover in place to account for things not going to plan, these problems can be minimised.
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