SMEs still see the UK as a great place to do business despite Brexit and a changing environment
The slow progress of Brexit negotiations, the impending GDPR and other political, regulatory and economic changes are understandably rocking the confidence of many business owners. However, a recent survey commissioned by Dun & Bradstreet and the Small Business Research Centre at Kingston University found that over half (54%) of small and medium enterprises interviewed were confident about their future success.
Growth in the face of uncertainty
This recent survey of SME managers and owners found the majority have a clear business strategy, and 77% believe they can achieve financial growth in the next five years. With record numbers of new businesses being created, 72% of respondents agreed that the UK is a great place to start a small business.
This positive sentiment is supported by the CBI’s recent monthly growth indicator, which was the highest since 2015. CBI statistics show that between November 2017 and February 2018, British businesses grew at the fastest rate in two years, suggesting that post-Brexit stagnation is not endemic across all businesses. Although some believe the Bank of England’s upgraded GDP growth forecast to be too optimistic, many SMEs appear to be ‘getting on with the day job’ and actively pursuing growth.
Brexit vs. the day job
Although Brexit will impact trading arrangements and funding options for SMEs, it’s not the only challenge they are facing. UK consumer spending continues on a downward trend with the weakest start to the year since 2012. The fluctuation of the pound and repercussions of the 2017 general election were also flagged by survey respondents as having a negative impact on their business.
Dun & Bradstreet’s survey found that everyday issues such as keeping ahead of the competition and finding new customers to target for growth were still a concern for SMEs. Lack of clarity on the UK’s departure from the EU was cited by over a third of SMEs as a challenge, but it didn’t top the list.
Using data to identify risk and drive opportunities
The SMEs surveyed said that they would benefit from more detailed information about the companies with which they do business. Conducting checks on new suppliers and new customers can be vital to mitigating exposure to risk. With late payments cited as a significant concern for SMEs, knowing the past payment behaviour of a new customer could influence the credit terms offered, or predict the likelihood of delayed invoices that could impact cashflow.
While SMEs often rely on personal contacts and recommendations, third party data is also available to identify ‘qualified’ new customers. For a growing business, finding new prospects and markets to target is critical and SMEs rarely have a large and dedicated sales and marketing team to do the analysis in-house. Buying in data and using analytics tools can be a worthwhile option to consider, saving time and helping to target sales and marketing activity more effectively, such as alerts on buyer readiness and propensity modelling.
Know your numbers
An increasing drive for more transparency, and initiatives such as the government’s credit data sharing scheme mean that information on SMEs is more readily available than ever before. Banks and other alternative lenders look at credit ratings to help them make lending decisions, and businesses increasingly look at the past behaviour and financial information of potential customers and suppliers to make decisions on who to do business with.
Today’s world is full of data. Picking out relevant and accurate information from the vast number of sources can help SMEs navigate uncertain times. Data can pinpoint the essential new connections required for growth, and more effectively manage existing business relationships.