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Are we in a changing world for the SME?

We live in a world which is changing at a faster pace than ever before…and that rate is accelerating. I started my career in banking at a time when the thought of supermarkets offering credit cards, personal loans and other financial products was laughable. It was a time when the large scale commercial use of computers was in its infancy, when telephones were always attached to a cable and the internet had not been thought of.

Of course, supermarkets started life as grocers and now they sell everything from food to furniture, pharmaceuticals to petrol. Although the retail industry has faced many challenges and there have been notable casualties, there are also those which have survived and prospered.

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Businesses which flourish when others fall by the wayside are those which are alert to the shifting demands of their customers, can read the market and adapt. They have the confidence to invest, and investment is essential for success.  That investment might be in fixed assets – hi tech equipment which enhances productivity enabling a company to deliver a quality product, reliably on time and at a competitive price. I recall seeing an early CAD laser cutter at a sign makers which was faster, more accurate and generated less waste than the labour-intensive machine it replaced. The cost of the machine was covered by the saving in wages in less than two years.

Investment doesn’t just relate to fixed assets. It could be staff training to address skill shortages, changing systems or additional speculation in marketing and PR to break into new markets.

Such investment has to be funded and there are plenty of alternative ways. Some companies may be in a position to meet it organically from historically retained profits. Many more will look to borrow money and the banks are open for business. Often traditional lending is supplemented with asset and debtor finance.

Even if your business is a new start-up or has picked up some adverse credit history during the recession and bank funding is not available there are other options and lenders in the market. Additionally, the business may qualify for grants or loans from funding agencies backed by such as the UK government and the European Investment Bank.

Don’t be put off if your business hits financial problems – most businesses do at some time. The trick is to take professional advice quickly and then act on it.

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