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Business Development & Marketing General Rescue, Restructuring & Recovery Turnaround

Family businesses surviving the centuries

 

According to the Institute for Family Businesses there are 3 million family firms in the UK and they represent two in every three UK private companies.

Moreover, some of these companies have endured and prospered for almost 500 years.

A recent article in the BBC magazine http://www.bbc.co.uk/news/magazine-25711108 provided a fascinating insight into some of these firms as well as asking how they had managed to survive for so long in a changing world.

They were a diverse bunch, from a family butcher that started with a market stall in Dorset in 1515, to a building company from Kent that has been trading since the reign of Elizabeth 1.

Two things stand out clearly in their survival.  They are attention to customer service; and a willingness to innovate.

Arguably trading conditions have never been tougher than they are in this the 21st Century with customers able to access global suppliers so for any SME owner who is competing in the current market these stories provide a lesson and encouragement.

With a positive attitude, with support from an experienced business advisor as and when needed, and with proper planning and focus on cash flow many SMEs could still be around for the next half millennium.

Categories
Banks, Lenders & Investors Business Development & Marketing Cash Flow & Forecasting General Turnaround

It’s all about getting the balance right if SMEs want to grow

 

There is a lot of optimism in the press and the New Year heralds confidence about the prospects for growth.

What does this mean for SMEs hoping to take advantage of the predicted improved trading conditions?

In a word: realism.

It requires deep knowledge of a business’s current financial position, specifically its current assets and liabilities, as these are crucial for funding growth.

If an SME is operating on very slender margins, or just about hanging on from month to month, it is unlikely to be able to take advantage of increasing orders without some additional finance and preferably not of the kind that relies on personal savings or support from friends and family, as a quarter of SMEs currently are, according to research by Bibby Financial Services.

SMEs will need to be mindful of two things when planning for growth. Firstly, it is looking increasingly likely that interest rates may start rising towards the end of 2014 which suggests that having a robust forecast will help assess the impact of interest rates before taking on more debt.

Secondly, there is as yet little evidence that lending to businesses is becoming any easier, especially loans from the banks or extended credit from suppliers which suggests that growth will need to be funded by either reserves or shareholders.

So an SME’s first step in planning for growth is to not only to know the current financial situation but to also have realistic forecasts that may need to be prepared with input from an external business advisor.