The heart of the British economy is made up by SMEs and are responsible for creating a majority of new jobs. The Federation of Small Businesses (FSB) says that in 2018 alone, SMEs accounted for more than 99 per cent of all private sector businesses in Britain, 60 per cent of private sector employment, and 51 per cent of all private sector turnover.
According to research carried out by Facebook, 5.4 million SMEs currently operate in the UK alone, and contribute £1.3 trillion to the UK economy. Across the whole of the European Union, 93 million people are employed by SMEs. The emerging presence of SMEs is ever growing, and the urge to empower them is paramount to economic growth.
In today’s business landscape, SMEs are determined to be more innovative, creative and digitally-conscious. The UK is at the forefront of a global revolution; the digital revolution. We see it everywhere in our daily lives – the dominance and continuous rise in profits of tech giants such as Amazon, Uber and e-commerce retailer Boohoo are leading examples that are showing us that the future is digital.
Big data, artificial intelligence and quantum computing are transforming the way that we live and that businesses operate across the globe. Entrepreneurs are focused more than ever on innovation and technology.
The result of this comes from an incremental growth of big chain retail stores shutting its doors, and new developments of consumer behaviour is continuously changing within leisure and e-commerce.
According to CITY A.M, retailers and leisure operators will need to explore different business models that resonate with tomorrow’s consumers, whilst research carried out by the team at Populous World found that SMEs will need to invest in hiring people with digital skills essential to the economy’s future. According to the Evening Standard, more than 1000 businesses are created in the UK annually, implying that there is sense of great courage and creativity implemented into today’s business sectors, which are necessary to build entrepreneurial and digital skills, essential to the future of the economy.
The importance of local businesses
In the UK, local businesses are encouraged to grow as they hire more people and strengthen communities, and when local businesses expand, the people with digital skills are in the highest demand.
London in particular, is community driven. Communities are the core of everything that Londoners do, and within these communities, ecosystems are created where new ideas, inspirations and shared experiences that influence entrepreneurs to contribute positively to communities. The London Community Foundation stresses that ensuring that a global city like London is home to people who feel a sense of belonging and shared identity must be at the heart of all the city’s major institutions. Expressing his importance on the support for local businesses, Alex Oritogun of Populous World, says, “Ambition behind empowering local SMEs is a strategy that is to be financially supported to build social capital and a stronger economy”.
Funding solutions for SMEs
New ideas develop into great things, particularly if there is a working product/service in place. However, acquiring knowledge and digitally advanced skills are not the only challenges that SMEs face to drive their businesses forward. Generating cash flow is a problem that a majority of SMEs find difficult to overcome.
Today there are many alternative sources of funding available for business owners and start-ups that need working capital to get ideas off the ground, or to make an existing business sustainable. As well as the success and popularity of crowdfunding that appeals to entrepreneurs and start-ups in particular, invoice finance is an effective and quick solution to obtain fast cash flow finance that allows businesses to accumulate their outstanding invoices or a single invoice and sell them to invoice buyers in return for 95% of the value of their invoices. Invoice finance is a great option for businesses to receive short-term cash flow solutions.
For businesses that are new in particular, there is always a challenge at the beginning of not having enough working capital to grow, particularly if new customers have agreed long payment cycles that can take as long as 60-90 days to pay. At Populous World, we fully support businesses of all sizes to financially propel to a position where they can focus on expansion, innovation and hiring the right digital skills needed, without having to worry about cash flow shortfalls. For more information, or to speak to a member of our funding specialist team, contact: [email protected]