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While there is still uncertainty surrounding whether we will have a hard or soft Brexit, it is important that SMEs prepare whatever the outcome is in 2019.

It’s impossible to know what the best course of action to take is because the overall decision is still unknown, but making small changes can help SMEs to stay prepared. Read on to find out more.

Consider a hedge fund

The sterling has already dropped in value, something that many businesses are feeling the effects of. While it has been beneficial for exporters, it has meant an increase in costs for importers. As Brexit negotiations continue, exchange rates could fluctuate even more and businesses will need to come up with ways that they can manage this risk. Hedging products that are considered complicated by traders is one resolution, as is creating a foreign currency bank account, which should help to manage the risk of changeable exchange rates.

Negotiate with suppliers for flexible contracts

If your SME works with suppliers on the continent, it may be beneficial to you to think about negotiating more flexible contracts with them before you make any decisions. If you don’t do this, you may find your business in a less than desirable financial situation if currency movements shift in the wrong way. Tariffs and custom duties might also be applied, which could mean you’d have to fork out even more money. 

Reconsider grant funding strategies

There is still a lot of uncertainty with regards to the continuation of EU grant funding, however, advice from Government is that businesses should continue to apply for these until more is known about how these types of grants will operate in the future. In the meantime, organisations can assess whether UK grants are available and can monitor how these develop. For SMEs it is also worth looking for new domestic opportunities that might arise post- Brexit. 

Unfortunately, it is still impossible to know what the future holds for SMEs regarding Brexit. Some are concerned about the implications while others are not. Either way, preparing for the worst-case scenario will help businesses to identify strengths and weaknesses of their current business operations.

If your SME is looking for expansion funding, or overdrafts, find out about the finance options that we have available here. 

If you’ve just launched your SME or are an entrepreneur still struggling to find your feet, it’s likely that you’ll constantly be looking for ways that you can save money.

From wages to running costs and marketing materials, a lot goes into running your business, and while you don’t want to scrimp and cut too many corners, looking for ways to cut back in an effective way can help you to ensure the longevity of your company.

Read on for some suggestions of creative ways that you can save money.

1.                Think of new ways to promote your companies online offering – It’s important that you are letting people know what your URL is, so try putting it on your letterhead and business cards and in e-mail signatures-wherever potential visitors are likely to see it. This will help you to cut costs but ensure that you continue to get your message out there.

2.                Consider where you are working from –Because most of us spend our entire working day either on the phone or on our laptops, it’s easier than ever for companies to operate in a mobile way. Having an office space a few days a week is a good idea because it means that you have the opportunity to hold meetings, but consider letting your staff work from home on the other days to save money.

3.                Make use of website builders –Every good business needs an effective website that helps promote the brand and gives customers an insight into what they can offer them. Instead of hiring a developer, make use of platforms like Squarespace, which are great for small businesses keen to increase their online exposure.

4.                Avoid buying new office equipment –When you do secure an office space, either on a temporary of fulltime basis, you will need to kit it out with furniture and monitors for your staff to work on. Sure, shiny new office equipment might look the part, but it’s no good if it leaves you with no money in the process. Save all that stuff for when you are well-established and can afford to splash out.

5.                Consider using freelancers and contractors – Competition is steep, which means that fulltime employees can cost a lot these days, so why consider freelancers instead? Training costs money and takes time, two things it’s unlikely you have an abundance of when you are still finding your feet.

Running a successful SME means ensuring that a number factors are working well together so that you can accommodate growth.

While setting up and running a small business comes with many different concerns, top of the list for most people is financial complications.

Instead of going about trying to implement a complete financial overhaul, check out this blog for tips about small steps you can take to managing your money daily as a small business owner.

Avoid mixing your personal and business finances

When the going gets tough it can be tempting to dip into your personal finances to iron out any problems that your business might be facing. Before you make any rash decisions though, consider the downside of doing this. From tax issues to personal liabilities and jumbled accounting records, mixing your businesses money with your own is something that you should  try and avoid at all costs.

Negotiate to secure a better deal

When buying goods from vendors, sometimes a little bit of bartering can go a long way. Try and make a habit of examining purchase terms and considering what will be the best option for you and your finances. Sometimes being given an extra 30 days to pay can save you more than a 5% discount off the initial asking price.

Make a habit of being more frugal with your money

By this we don’t mean turning into a serial penny pincher who will do anything to save a few pennies, but making the right purchasing decisions can really help you in the long run when it comes to your finances. Small changes like buying second-hand furniture for your office and going green to save money on your utilities can make all the difference.

Invest in Cloud-based accounting software 

Regular accounting software is fine for managing your finances but there is no chance that it will deliver the convenience that cloud-based accounting options can. By using the web-based software you will be benefitting from real-time insights as you will have the ability to store, update, track and access data from anywhere at any given time. Whether you are in the office, sitting on the train or relaxing at home, you’ll be able to keep a clear eye on your finances at all times.

Outsourcing

Generally, the businesses that will save the most money from outsourcing work are start-ups. Typically tasks that are outsourced include data entry and processing, customer support, payroll processing, etc.

If your SME needs to access capital and you’re struggling to do so through the traditional methods, get in touch with us here today and see how GIC Capital can help you to reach your full potential. 

Finance responds to what’s happening on the global stage. Many small businesses live in fear of worldwide currency fluctuations, which can have a detrimental impact on imports and exports and ultimately threaten their all-important bottom line. If your business relies on trading with other nations or securing financial support from overseas, you are at the mercy of circumstances outside of your control, often dictated by factors such as political instability and economic pressure. Let’s take a closer look at some of the ways your SME could be affected by fluctuating currency rates and ways to obviate this risk.

Dominant Currency Threats to SMEs

Only purely domestic companies ever truly escape the risk of currency fluctuation. However, many businesses nowadays, particularly smaller companies, rely on a combination of domestic revenue and overseas revenue. Having multiple revenue streams opens you up to risk when currencies start to fluctuate, as the exchange rate is not always in your favour. If your products are imported from overseas and sold in the UK, you are at risk. If your business exports overseas while manufacturing in the UK, you are also at risk. This is one of the reasons why Brexit has proven so divisive to business owners, as even a small drop in the value of the Pound Sterling relative to the Euro could have devastating consequences. Small businesses rarely have the buffer zone in place which larger companies rely upon, and when your profit margins are already tight, this can be difficult to get around.

In another scenario, you may have investors overseas and find you lose some of the value of their investment in an unfavourable exchange rate. Few companies have zero risk as a result of currency fluctuation.

Taking Stock of Your Risks

Whilst it’s impossible completely safeguard your business from these risks you can help to lessen them with some clever forward-planning. Begin by creating an inventory of your revenue streams. Perhaps you employ freelancers who you pay in their native currency. Maybe you have a warehouse or stock which is designed overseas. Your activities will have created a certain financial footprint, so list everything you do which is conducted in foreign currency.

Secondly, consider some less than desirable scenarios and how you would handle them. Facing the worst can help you to plan ahead and perhaps find valuable ways of lessening your risk and keeping hold of more of your business profits. 

Both boom times and recessions come and go, and the toughest businesses weather the storms and come out at the other end fighting fit. SMEs are at great risk from financial hardship as the burdens of running your small company can sometimes be dramatic, and come without the financial buffers and safeguards that larger companies have more access to. However, there are ways to help ensure you stay afloat through your trickier periods. Here’s our quick guide to getting through.

Avoid Further Debt

In lean times, cash becomes your best friend. Avoid making purchases which require incurring debt to access, and limit all expenditure unless you are convinced it will lead to greater cash flow than it is costing you at this moment. If the item you are purchasing cannot effectively pay for itself in revenue earned, you should be deferring the purchase until a later date.

Review with Your Financier

 Be honest and open with your financial advisor so they can help you weather the financial storm. Provide any information they request to avoid delaying guidance, which could be helpful in avoiding losses. If you have any direct concerns, write them down and share them with your advisor so they can give practical and tailored advice.

Budget, Budget, Budget

It is highly likely you already stick to a business budget, but this is the time to keep your budgeting ethos as rigid as possible. As the owner of an SME, ensure you apply the same principles to your personal accounts to avoid draining them to cover business expenses. Your own financial stability is closely tied to your company, so recognise this link and budget accordingly.

Deal with Problems Swiftly

It can be tempting to run from taking a long, hard look at your finances during times of hardship. However, dealing with problems as they arise, having sought the correct guidance where applicable, ensures debts don’t spiral out of control. Be cautious in your future spending and cut anything unnecessary, but remain culpable and professional when it comes to honouring necessary existing commitments. 

Keep a Clear Head

Try not to panic. Worrying cause you to make poor business choices and the impact of those will last far longer than your current crisis. If you need to, take the weekend off and give yourself time to adjust to troubling financial times – you’ll return refreshed and ready to fight on.