Securing Your Future: Growth Strategies For Small Businesses

Harrogate Spring Water
Harrogate Spring Water

Small and medium-sized businesses are the backbone of the UK economy, but many do not achieve the growth they need to survive. The sustainable growth of businesses in the UK is now more relevant than ever, as SMEs face uncertainty from Brexit, on top of their usual challenges.

Here are three options to help support that all-important business growth.

Get equipped

As businesses grow, they will need to overcome the financial hurdle of purchasing new, and often expensive, equipment. Whether it is a new pallet truck or state-of-the-art printer, asset financing is one way for SMEs to purchase equipment needed to meet customer demand, without tying up valuable working capital. Most importantly, businesses will be able to diversify what they offer and help secure their future.

Diversifying was Steve Mitchell’s, managing director of Planet Granite, principal aim in applying for asset finance. The granite and stone-cutting business in the UK has changed very little over recent decades. Mitchell knew that to get a competitive edge, he should replace his traditional diamond saw, which only cuts stone, with something more diverse. He purchased a water jet-cutter – that can cut anything and is only the second of its kind in the UK – taking his business to the next level. Now, the regular workflow of kitchen worktops is supplemented by work Planet Granite could never have secured before.

Today, this small Warwickshire-based business is supplying metalwork for restaurants in Dubai and gaskets for 250 limited edition Jaguar F-Types in Coventry. Mitchell’s plan to increase his £2m turnover to £5m in as many years would not have been possible without approaching a bank for finance. The success this has brought him has solidified his belief that the secret of a good business is “a good relationship with your staff, a better relationship with your customers; but to grow your business, I think you need a good relationship with your bank,” he says.

Cashflow is king

For Mitchell, that bank was Aldermore. “Small businesses are the backbone of the UK economy and it is vital each and every one of them receives the support they need,” says Carl D’Ammassa, group managing director of business finance at Aldermore. “Our recent data has found that a fifth of all UK SMEs have missed out on a new business opportunity in the last year due to a lack of available finance, costing each of them an average of £71,256.1

“As a lender focused on supporting SMEs of all shapes and sizes in a number of different industrial sectors, we thrive on educating businesses about bespoke, flexible and cost-efficient funding options available to them, such as asset finance and invoice finance. Everything we do is focused on providing businesses with the kind of support needed to seize opportunities and achieve their own business aims.”

For SMEs, a can-do attitude and ambitious plans can only take the business so far. As small businesses attempt to grow by employing the right people, deploying marketing strategies and building key relationships, they can often find their cashflow lagging behind with much-needed working capital locked up in unpaid invoices.

Simply put, invoice financing and factoring allows a small business to convert 90% of their unpaid invoices into working capital, often with the bonus of a credit control service to free up valuable human resources. Quickly releasing cash into a small business can have a transformative effect on its potential to move with, and adapt to, shifts in the market and consumer demands. The ability to embrace new opportunities as they happen can help to future-proof a business.

Scale up

Businesses can grow quickly, and having the flexibility to meet a big increase in customer demand is vital to business success and remaining competitive. After 20% YOY growth, scaling up production is exactly what long term Aldermore partner Harrogate Water did. The challenger brand is opening a new state of the art bottling facility which will support Harrogate Spring Water’s vision for the future – to continue supplying their naturally sourced bottled water to meet an ever-growing consumer demand, not only in the UK but globally. Through asset finance, Harrogate Water will be able to increase their production to 27,000 bottles per hour, enabling them to keep up with consumer demand.

Managing director James Cain said: “Continuing strong demand in both home and export markets makes further investment essential to remain ahead of the curve. The new production line will provide us with the capacity and flexibility to meet customer needs and compete more effectively in high-volume markets.

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