Based on some recent surveys which targeted 250 SMEs throughout the UK with between 1-250 employees highlighted some common issues facing business owners.  Furthermore, a quarter of respondents also claimed that there was room for improvement within their business and approximately 20 per cent of business owners stated that they were involved in every aspect of their business.

Beyond survival, businesses also face considerable challenges in achieving growth with two thirds of small business owners admitting that it is difficult to grow their firm and three fifths of owners lacking confidence in their ability to achieve three-year continued growth.

With over 5m businesses in the UK – the majority being SMEs, this research is a concern if organisations are to continue to grow and thrive in today’s market.

“It’s vital that businesses have the necessary knowledge to be more efficient in their business to ensure customer satisfaction, improve employee engagement and to enable access to new markets. Standards or management systems can help businesses to focus on the products and services that they deliver, their business processes and the way that they manage their organisation as a whole.

However, it’s not just a simple case of buying a standard – businesses should firstly understand what is required for their organisation in order to improve. What are the biggest risks, what processes need to be implemented, and what leadership is required? Secondly, business owners should ensure that their employees have the necessary tools and skills to understand their part in the process – workshops, seminars and training are a key element of this. There are systems available that can help to effectively manage core areas of any business. Finally, once a standard is in place, businesses should market their achievement to potential and existing customers – this provides customers with reassurance that your company is working as efficiently and effectively as possible.”

Small companies in the UK face myriad problems on a day-to-day basis. External problems are countless and include the state of the economy, the high cost of insurance, taxes, red tape, health and safety, lack of bank lending, competition within the UK and from abroad, transport issues, employee skills gaps and shortages – the list goes on.

Internal problems are no less strenuous. Here are some of the issues facing Britain’s small businesses:

Cash

Finding it and managing the cash flow. If you are a fast-growth company you can rapidly outgrow your available sources – if you are an underperforming company you can’t access it. The majority of companies do not manage it well.

Most businesses experience some problems getting paid on time by their customers and with debt recovery. Good credit control helps to prevent this becoming a serious problem.

A surprisingly large proportion of firms have a bad credit rating. Having a good credit score is not only important to enable you to borrow funds, but will also affect your ability to secure good terms on trade credit.

Lack of a clear plan

Most businesses don’t know how to plan. Lack of a plan worsens the cash problem by wasting cash-chasing tempting diversions, and throwing money at problems. Equally important is revising your plan according to changing economic and business conditions.

Ineffective leadership

This issue takes many forms. It is frequently in the form of depth of leadership. The founder of the company is too much hands-on and a) does not concentrate enough on his primary role as a leader rather than a manager and b) fails to enlist support of competent managers and staff behind him or her either through recruitment or by outsourcing. This eventually causes the company to stop growing and could eventually lead to failure. Directors should always remember their core role and responsibilities.

Sales and marketing effectiveness

This leads back to planning and leadership. Many businesses do not take enough time to decide what their unique selling point is. They try to compete in conflicting areas, such as lowest price and highest service. One takes away money and the other adds cost. Part of the planning process for a new product should include a very clear answer to one simple question, ‘with all of the products and service available to my customers why should they buy from me?’

Lack of execution

This may be the biggest problem of all

  • Strategies that are developed and are never executed- ie there are n time bound activities to DO what needs to be done
  • Improvement projects fail—there is no Profit Improvement Plan (PIP) in place or even if there is it is a theoretical exercise and is not actioned.
  • Leaders spend less than one-hour per month ON strategy
  • Employees don’t know their company’s strategy. (This is a direct result of top management not documenting and communicating it.) Communicating with employees is crucial
  • Organisations don’t have meaningful performance measurements in place or carry out regular performance analysis.

Other common problems facing SMEs are:

  • Finding and keeping clients and/or customers
  • Preventing clients from eating away at your profits
  • Time management
  • Knowing how to price your services correctly
  • Writing bids and proposals
  • FUNDING, RECRUITMENT AND INCREASING COSTS ARE SEEN AS SOME OF THE BIGGEST CHALLENGESWhen asked about productivity within the business, SMEs identified staff morale as having the biggest impact and 25 per cent noted social outings as the best way of keeping morale and motivation high. Staff turnover was illustrated as a more pressing issue for industries such as retail, with the setting of realistic goals and workload being the most effective way of ensuring staff morale is high.

    Nearly a quarter of SMEs across the varying industries plan to invest the greatest amount of their budget into HR/People management, in order to improve their business. Those in the finance sector also said the majority of their time would be spent improving their knowledge of these areas of their business.

    One way to improve customer service is better communication on social media, but this too is still an issue for many, with Facebook (38%) and Twitter (26%) identified as the most challenging social media platforms by SME owners across a number of industries.

  • This “pattern” of issues for SME’s is all too familiar.

It’s vital to go back to basics and take a fresh top down look at your business.

Here’s a checklist to get you started:

  • Establish the Vision for the business
  • Establish your Mission
  • Establish your business Culture
  • Set the key goals for the business in the following key areas:
  • Sales
  • Marketing
  • Financials
  • Team and Organisation structure and how needs to change over the next 1/3/5 years
  • Review your Systems in the business