Preparing for the next rainy day: increasing the ability to withstand, adapt and thrive

Throughout the pandemic, SME business owners have shown strength, determination and adaptability to ensure their business survived through the toughest of times.

Many SMEs continue to feel the financial effect of restrictions on their monthly income. While things have improved from a dire 30% loss in July 2020, SMEs are still seeing an 18% drop in revenue*.

2020 was a year like no other for SMEs. The Covid-19 pandemic presented them with challenges they’ve  never experienced before. Now, with the vaccine rollout continuing at speed and restrictions nearly fully lifted, SMEs are taking action. They’re making sure that the lessons learnt from the last 15 months are carried out in their planning. Indeed, the vast majority of SME business owners (87%)* are actively preparing for future potential economic shocks.

Communication is key

Customer loyalty and retention have been identified as vital for SMEs if they are to survive any crisis.

 Taking care of existing customers is a priority for SME owners. One in five businesses (17%)* see customer retention as an absolute priority in preparing their business for any future crisis. As lockdown restrictions decrease, many businesses will create clearer communications with their customers (16%)* to make sure their relationships remain strong.

There are various ways that can help nurture these relationships, beyond commercial deals:

  • Regular calls or meetings show that you’re interested in your customer’s operations.
  • Emails or newsletters keep your customers informed of company news, products and innovations.
  • Social media is a great way to stay in touch with customers and showcase activities.

 

Check out our marketing guide about promoting your business and developing valuable communications.

The importance of a strong online presence

In addition to customer retention, the last year has seen many businesses understand the value of a sophisticated digital presence. One in seven (15%)* SMEs plan to diversify their business and move more of it online. This makes  digital marketing the primary investment for growth for the next 12 months.

A strong digital presence is a lifeline in a world where doing business in person is restricted.  But, beyond this, it’s an important tool to get customer insights that support further growth.

Building reserves for rainy days

As well as planning for adverse circumstances, it’s also important for SMEs to start building financial safety nets. This will help them to continue to cover their overheads in times of crisis.

The lack of available business savings throughout the pandemic has encouraged 15% of SME owners to increase their safety net. The average SME aims to put aside £147,266 to cope with future economic shocks*.

Our business saving accounts can help SMEs earn interest on their surplus cash. We offer competitive rates on deposits starting from as little as £1,000.  We also offer peace of mind as investments are protected by the Financial Services Compensation Scheme, the UK's deposit guarantee scheme.

Click here to find out more about our range of business savings savings accounts.

Investing to futureproof your business

The past year has been a difficult and uncertain time for SMEs, with many focusing solely on survival.

Whether they’re getting prepared for the next crisis or looking at grasping new opportunities by investing in new technologies or diversifying operations, accessing the right support for the journey is key for business owners.

One in 10 (11%)* businesses plan to use specialist business finance products, such as Asset Finance and Invoice Finance, so they can still aim for growth without compromising cashflow or eating into their all-important nest egg.

We understand the challenges involved in growing a business and safeguarding it from future shocks. Our expert teams work closely with businesses to understand their needs and provide specialist finance options so they can adapt, innovate, transform and thrive.  As our customer, Gareth Dillon, managing director at RDCP infrastructure, highlights:

“It was clear that Aldermore actually had a grasp of the intricacies of the problems associated of being an SME in construction, it massively helped when the pandemic hit. Some of our clients basically pulled the shutters down and stopped doing everything, so we had an instant drop in turnover which put a massive strain on cashflow.  If we had traditional banking, we would have been in trouble.” 

For a business looking to free up cashflow that they know is due to them, Invoice Finance could help by turning outstanding invoices into ready working capital, which can then be reinvested in the business. 

Find out more about our Invoice Finance product range here.

 

To help with an expensive, upfront outlay, Asset Finance could help spread the cost of investment over the course of its life.

Find out more about our Asset Finance product range here.

 

Sources:

(*)Opinium Survey: 10 - 25 February 2021- 1,271 senior decision makers at small to medium-sized UK businesses

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