Challenges By Small Businesses Today

The biggest problems facing small businesses today

Numerous surveys highlight a wide range of problems which small businesses face on a daily basis both internally and externally.

External problems are countless, including the state of the economy, the high cost of insurance, taxes, red tape, health & safety, lack of bank lending, competition within the UK and from abroad, transport issues, employee skills gaps and shortages, and the list just goes on.

Internal problems are no less strenuous:

Finding it and managing the cashflow. It’s hard to get and there is never enough. If you are a fast growth company you can rapidly outgrow your available sources, if you are an underperforming company you can’t get it. The majority of companies don’t manage it well. Overdrafts, credit cards and leasing/hire purchase are the most commonly used forms of finance. Factoring and invoice discounting, loans from friends and family and new equity are the least common sources. Commercial loans, grants and overdraft had become substantially harder to obtain for a significant minority of businesses.

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.

Six out of ten of small firms have a bad credit rating, according to credit reference agency Graydon UK. 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.