SME’s And The Fight Against Our Current Financial Climate

In today’s U.K current climate, local businesses struggle to survive economic uncertainty due to the magnitude of conglomerates and gentrification of outer London areas.

Year after year, independent SMEs are overshadowed by towering office blocks and shiny new residential developments backed by large private investment companies. The influx of large corporations means that SMEs fight a daily battle when it comes to higher rental rates, even larger chain retailers are fighting against inner city rental prices. Manufacturers and wholesalers economically survive better in areas outside of the capital. With increased rental rates and area upgrades, businesses need to stay afloat and compete vigourously. Gentrified areas can, however, be of little impact to SMEs that are organised and have a strong cash position.

An imperative factor that contributes to the longevity and sustainability of a small business is of course, ample cash flow. It is unquestionably an imperative ingredient in any business model, but difficult to come by if you have long payment terms between you and your customers. By staying in touch with cash flow, you will be in a position to predict a future shortfall and stay in the race against surrounding big players.

Invoice finance providers offer business funding solutions and by adopting this service, SMEs may find the solution they are looking for to solve their cash flow problems.

By monitoring and foreseeing a business’s cash flow trend and predicted shortfalls, entrepreneurs can dodge a fatal dip in working capital that disconnects the business from operating smoothly. Not all businesses are fortunate enough to adapt and respond to changing economic climates, but those that adopt fastidious cash management can effectively surpass the enduring downfalls and stand a higher chance of survival. Of course there are factors that are unavoidable for any business, such as seasonality changes and unexpected expenses that can hinder running operations, and until those factors subside, a reserve amount of cash in the bank can tide you over until the upturn.

Procurable cash flow optimises productivity and efficiency. Entrepreneurs that manage business’ cash flow in a sustainable and timely manner can reach their goals and objectives, working alongside financial directors to ensure budget management and oversee cash flow expectations. The cash flow available from operating activities when spent conservatively can be then used to grow its business and reinvest into new or existing ventures.

A healthy business that generates positive net cash flow from its operations should grow significantly over time. However, if a business fails to consistently generate positive net cash from operating activities, it may need to rely on outside financing to operate such as invoice finance providers that do not have the same restrictive barriers such as traditional banks.

The success of a small business not only strengthens local economies but also provides more employment opportunities for those who may not be employable by large corporations.

Populous World is an invoice discounting platform that helps a wide range of SMEs to fill cash flow gaps and avoid a credit shortfall.

To find out more, please contact: [email protected]