According to new research by the Economist Intelligence Unit, more and more small businesses worldwide are preparing for growth in the coming years. This is despite ongoing economic strife in many of the world’s big economies - not just the UK but globally – but more and more SMEs are creating flexible platforms that will allow fast growth in the future.
The study, called ‘Scaling SMEs: Building a flexible platform for growth’, is based on research and in depth interviews with 17 senior directors of SMEs and other knowledgeable experts. It shows that many SMEs are implementing corporate growth strategies that set out how they’re planning to scale their business operations. This will ensure they have enough resources to deliver sustainable growth over the coming months and years.
The key findings of the research included:
- High growth SMEs are setting operational strategies for scaling their business. This includes making sure there’s an operational strategy in place and ensuring there are predictable lines of communication. This also means setting up a defined infrastructure, something that many SMEs lack.
- One key ingredient to delivering growth was maintaining good working capital and healthy cash flow. It’s important to be on track with both of these before starting to think about delivering growth and scaling. Having a balanced funding structure and well looked after invoicing procedure were two of the most common steps in achieving this.
- Technology and IT systems were highly important to many of the SMEs interviewed. Cloud computing and enterprise resource planning systems were some of the services employed by SMEs. This allows for greater flexibility and scalability, as well as reinforcing infrastructure and resilience.
There were many other things that this research uncovered. However, funding and cash flow were two of the most central points for many businesses. As such, it’s important to know your funding options, whether that’s invoice finance or another alternative funding method.