Some business problems are common to all sorts of companies, no matter what industry you’re in. Being able to spot a business issue before it starts to affect performance is a valuable tool whatever size your business is. So what common problems do SMEs encounter, and how can you go about avoiding them?
Common business problems that can affect any business can include:
- Problems with sustainable profit: This is something that any business can struggle with, and is one of the hardest problems to solve. It can all come down to a simple lack sales, which can affect any business. However, it can also be down to attempting to grow too far, too fast, which can lead to over extending your business’s capabilities. Unsustainable growth is a big problem as well as a simple lack of growth.
- Cash flow: This is something that every business needs, and a lack of cash flow leads to all sorts of problems. It all comes back to customer sales, but equally it can come down to a poor invoicing procedure. Many businesses with full order books struggle because they just don’t have the payments coming in that back up their sales. What’s more, if your invoices go out late, incorrect or aren’t chased up then customers will fail to pay on time and therefore limit cash flow.
- Late payment issues: These are something else that affect both sustainable profit and cash flow. It’s hard to solve late payment when you’re reliant on others to pay their debt. If you’re caught in a supply chain it can be even harder, as larger chain stores will often delay payment to smaller suppliers, who are unable to leverage quicker payment.
Does your business suffer from any of these problems? If it does then you’re certainly not alone. It could be worth looking into invoice finance as a way to unlock the working capital tied up in unpaid invoices which can really boost cash flow, late payment and sustainable profit.