While it’s easy to overlook small and medium-sized ventures (SMEs) in the UK economy, such ventures account for 99.9% of the region’s total business population.
SMEs also employed 16.3 million people, which is around 61% of the total workforce in the UK.
But what steps can you take to develop your small business in the current challenging climate? Here are some ideas to keep in mind:
#1. Be Careful When it Comes to Buying Commercial Property
As businesses continue to evolve, they may start to outgrow their working environment or existing arrangements.
This will encourage many to consider investing in larger commercial premises that can sustain them as they grow for a considerable period of time. While this may be preferable to agreeing a costly, long-term lease, however, it can also incur a significant cost that may be worth more than your company can bear.
So, this needs to be considered carefully, along with other, more agile options such as investing in temporary or pop-up workplaces that are retained on a rolling basis.
Remember, hybrid working has recently entered a third stage and is increasingly popular in the wake of the coronavirus pandemic, so creating more flexible workplaces may be particularly cost-effective and efficient in the digital age.
#2. Buying New Equipment
Depending on the nature of your industry or workplace, you may have various equipment needs that are central to your business.
This is particularly true in warehouse and industrial settings, while the rise of automation has also created a pressing need for new and increasingly innovative workplace tools.
Interestingly, investing in new equipment can enhance work efficiency and productivity over time, potentially by reducing the need for manual tasks and driving huge cost savings in the longer-term.
Once again, you’ll have to choose between buying or leasing equipment, although the former can also help to minimise long-term costs and boost your company coffers more effectively.
#3. Consider a Management Buyout
When developing your business, the key is to forge a viable path forward that allows for sustainable and manageable growth.
Depending on the circumstances, this may require some form of corporate restructuring, with a management buyout (MBO) offering an increasingly popular option among small and medium-sized ventures.
This sees an existing management and leadership team acquire the ownership or a majority shareholding in a business from the owner. It may occur in instances where the existing owner is stepping down or retiring, while buyers may require secured business loans to help fund the transaction.
MBOs often help SMEs to scale while reducing company operations too, which is a key consideration when looking to grow sustainably within a given time-frame.