Back to business: Challenges SMEs are facing now and in the year ahead

Over the course of 2020 SMEs have faced a whole host of unprecedented challenges.

Now, as we look towards the latter half of the financial year, it’s time to reflect on these challenges, and plan ahead to make sure your business is in a strong position when it comes to facing the year ahead.

Below, I’ve outlined some of the key challenges that have been coming up in conversation with business owners as of late.

Cashflow management

At the turn of the year, none of us could have predicted that UK business would be grinding to a halt come April. Obviously, this has had an enormous knock-on effect when it comes to cashflow.

And unfortunately we’re not out of the woods as of yet. With the Governmental support measures drawing to a close in the next few months, some businesses will find themselves in a difficult position come December, with little support available.

Working closely with your accountant to create a clear and robust cashflow forecast will stand you in good stead here. Knowing when and where your cash is going out to/coming in from will help you in the strategic decision making process, and help you to forward plan.

Operations

After months of having team members on furlough, and working from home, many owner-managers are now starting to reintegrate their teams back into the workplace. As such, balancing social distancing and workflow is proving to be a real challenge for owner-managers across the UK.

In this instance, it’s worth thinking outside of the 9-5 box. Could your staff work flexi hours, or over the weekend, meaning that less people are in the office at one given time? Have you considered staggered start times and one-way systems in the office? These are just some of the questions that need to be considered when moving back into the workplace.

Your team

With the furlough scheme ending in a matter of weeks, some difficult decisions might have to be made when it comes to jobs. This said, this isn’t the case for everyone, even now retaining and recruiting talent is still on the agenda for a huge amount of business owners.

Whether you are having to cut your team back or you are looking to recruit new people, putting your team’s wellbeing first is even more crucial during these uncertain times - whether it’s ensuring a safe environment in the workplace, or ensuring the mental well-being your team whilst working from home.

With regards to the latter, communication is key - even if it is just a virtual coffee over Teams/Zoom. Ensuring your team don’t feel cut-off whilst working remotely is crucial to ensure motivation and productivity aren't impacted.

Technology and cyber security

With a sharp rise in cyber crime during lockdown and changes to Making Tax Digital legislation, technology and cyber security will be playing on the minds of business owners across the UK.

Just last month it was announced that all VAT registered businesses will have to move into the digital sphere by 2022. Cloud accounting is an easy, MTD-compliant way of keeping on top of your business, and you can rest assured knowing that your data is safe, with password protection and two-step authentication available.

In the short-term, cloud accounting will allow you to keep your business running if we do see a second wave or local lockdown measures being implemented, by giving you access to real-time data wherever you are. Looking beyond the current climate, to a post-COVID world, online based accounting ultimately let’s you run your business in a more timely and efficient manner.

Planning ahead

Despite all the challenges that SMEs have faced this year, now is the time to start working closely with your advisors to start planning for the year ahead, ensuring your business is in the most resilient position possible going forward.