A study conducted by a commercial lender has found that whilst a large proportion of the UK’s SMEs are planning to grow over the next year off the back of a slowly strengthening economy, ‘differing growth priorities’ that exist between respective senior decision-makers are putting the brakes on said growth.
The Road to Growth report, commissioned by ABN AMRO Commercial Finance and based on opinion garnered from 450 small and mid-sized enterprises, found that two thirds of SME owners are actively pursuing growth for their businesses. 58% questioned admitted to considering growth more so today than at the same point last year.
With the green shoots of recovery being spoken of by economic experts including ICAEW’s Head of Business Simon Alsop, after a period where 55% of business owners admitting to delaying strategic decisions, what’s stopping businesses from realising their corporate ambition now the recession is over? The question of restrictive finances on the part of traditional financiers has been talked about at great length, with many organisations looking to alternative methods of freeing up cash for expansion, including invoice discounting.
The real hurdle, the report found, lies in the relationships between respective business partners. Over 20% of decision makers believe differing priorities are holding back their company, whilst 40% complain of a ‘state of limbo’ existing at the boardroom level. The key figure is 44%; the percentage of senior decision makers who believe that they do not have the right people in place in order to reach their potential.
The manufacturing sector, renowned for its willingness to engage in invoice finance and asset based lending methodology, has been growing at its strongest rate in more than three years, however other industries are lagging behind.
Disputes at board level are nothing new in business, with many famous examples throughout history to point to. Facebook’s Mark Zuckerberg ousted his partner Eduardo Saverin in a heated courtroom dispute that was made into a Hollywood film, whilst Manchester United was sold as a result of a disagreement over the value of a race horse owned by Sir Alex Ferguson in 2005. Both companies of course went on to flourish in the aftermath.
So maybe it’s time to assess whether or not your business partners are as up to the task as you feel you are, in order to maximise those growth opportunities that once again present themselves to small businesses after a long period of consolidation.