In the face of uncertain economic conditions and an ongoing cost-of-living crisis, business expansion can seem like an uphill battle. However, there are strategies and support available to help companies navigate key challenges. In this article, we explore how to increase business growth and thrive despite the economic storm clouds.
We’ll shed light on the specific challenges UK businesses are currently facing, provide practical advice on how to overcome these obstacles and underscore the crucial role business finance can play in accelerating your company's growth. By the end of this whistle-stop tour of the UK economy, you'll be better equipped with the knowledge and strategies for how to expand your business, even in the toughest of economic climates. Let’s buckle up.
The current economic climate presents several challenges for UK businesses, impacting companies across various industries, which can limit their growth potential.
We outline some of the key challenges below:
For business owners, it can feel like an endless game of whack-a-mole when navigating the UK economic climate and its barriers to growth.
It’s not surprising to see that more than three-fifths (62%) of new small businesses fail within the first five years, according to Finder, with a survival rate of only 38% for UK businesses over this period.
The reasons businesses struggle to grow or fail to find traction can be wide and varied, however, there are ways for you to not only buck the trend but expand your business.
Before outlining how to increase business growth, let’s cover some of the main barriers you’ll likely face.
Maintaining a healthy cash flow is crucial for business survival and growth. Without sufficient cash on hand, you may struggle to cover your day-to-day expenses, let alone invest in growth opportunities.
Cash flow shortages can also create problems during certain periods, especially for businesses that have a seasonal component to their operations.
Solutions available: business loans, merchant cash advances and invoice finance.
Getting the right people for the right roles is crucial for business expansion, but retaining top talent is becoming increasingly difficult amid “The Great Resignation”. Finding and attracting such individuals can be challenging, especially in competitive job markets.
Retaining top talent is equally important. High employee turnover can lead to disruptions in operations, loss of institutional knowledge, and increased costs associated with hiring and training new employees. Furthermore, losing top performers can negatively impact your competitiveness and ability to achieve strategic goals.
Solutions available: business loans.
Access to capital is crucial for business growth, allowing you to invest in new opportunities, manage cash flow, hire staff and purchase essential equipment. Perceived difficulties in accessing capital can present significant challenges for businesses, especially for those with adverse credit histories.
Commercial finance providers, such as Millbrook Business Finance, exist to remove these barriers to funding. We have a streamlined application process and offer access to bespoke finance solutions through a panel of 100+ of the UK’s best business lenders.
The rapid advancement of technology is pushing many businesses toward digital transformation. However, the need to overhaul legacy systems can be a significant hurdle, especially if you’re facing capital constraints.
You can explore various strategies. For instance, consider a phased implementation approach, where you gradually replace parts of your outdated systems over time. Alternatively, seek external financing expertise to support your digital transformation efforts to reach your goals faster.
Solutions available: business loans and asset and equipment finance.
Businesses may resist change due to fears of risks and logistical challenges involved. However, embracing change and innovation is an essential way to increase business growth and a critical aspect of successful transformation. By proactively addressing resistance and fostering an organisational culture that embraces change, you can better position yourself to navigate the uncertainties of the business environment and seize new opportunities.
Market volatility and economic uncertainty can make businesses hesitant to implement significant changes. Many adopt a "wait and see" approach by delaying investments or strategic decisions until the economic landscape becomes clearer.
While this cautious approach can help manage short-term risks, it can also lead to missed opportunities to increase growth and innovate. To navigate economic uncertainty, you may need to adopt more flexible and resilient strategies. This could involve diversifying revenue streams or investing in technology, machinery, or equipment to improve efficiency and adaptability.
Solutions available: business loans and asset and equipment finance.
Despite these challenges, there are effective strategies you can adopt to keep your expansion plans on track.
Ready to explore how to increase business growth amid the challenges of the UK’s economic climate? Here are seven great ways to foster business growth:
This is a strategic approach that involves broadening a company's range of products or markets. It can open up new opportunities, generate additional revenue streams and reduce risk. Diversification can also help businesses to capitalise on new trends or technological advancements, enabling you to stay competitive in your industry.
However, ensure you have the necessary resources and capabilities to manage the increased complexity that comes with a broader product portfolio.
Working smarter and leveraging the latest tools and technologies can enhance efficiency, streamline processes, improve customer service, and enhance product quality. To implement this advancement strategy you need to consider factors like cost, training needs, data security and potential disruption to operations.
Exploring and leveraging business finance solutions can play a crucial role in overcoming financial challenges and supporting growth. These solutions can come in various forms, including business loans, asset and equipment finance, equity release through refinance, merchant cash advances, and more. These solutions can provide the necessary capital to fund startup costs, expansion plans or day-to-day operations. They can also help businesses survive periods of low sales or cash flow, invest in new technologies or seize market growth opportunities.
Short-term loans can prove to be a valuable resource for businesses by providing quick access to funds, thereby helping to fuel growth.
Short-term loans are typically loans with terms of one year or less. They can be used for a variety of business purposes, including managing cash flow, financing small-scale expansion projects, covering unexpected expenses or providing working capital during slow periods.
One of the main advantages of short-term loans is their speed and convenience. They usually involve less paperwork and are quicker to arrange than long-term loans. This makes them a good option for businesses that need funds urgently.
Learn about the different loan options to explore: What is the Difference Between Secured and Unsecured Loans?
Affordable and flexible equipment lease or hire agreements can be instrumental in helping businesses manage costs, maintain operational efficiency, and achieve growth. Lease or hire agreements allow businesses to use equipment without the need for a large upfront investment. This can free up cash flow for other important business activities.
Another advantage of leasing or hiring equipment is that it can provide access to the latest technology or high-quality equipment that might otherwise be too expensive to purchase outright.
However, to maximise these benefits, you need to carefully negotiate and manage your lease or hire agreements. Ensure the terms are clear and that you have secured manageable and affordable terms. This is where using a business finance specialist like Millbrook can be a game-changer.
Read about the different types of assets you can fund with this type of business finance: What Assets and Equipment Can My Business Finance?
Focusing on increasing digital engagement to attract organic leads can be a cost-effective strategy for businesses, leading to sustainable growth. This is a slower strategy that involves patience and planning, but one that can result in higher customer loyalty rates.
To boost digital engagement and organic leads, you can use strategies like improving your website's SEO, producing high-quality and relevant content, leveraging social media platforms and using email marketing effectively.
Fostering the right company culture is important for retaining top talent and is a critical part of any organisation’s success. High employee turnover can be costly, both in terms of recruitment costs and lost productivity. Therefore, it's essential to focus on creating a culture that attracts and retains high-quality employees, including encouraging a work-life balance, fostering inclusivity and diversity and providing opportunities for growth and development.
We know the impact of good company culture first-hand, as we recently picked up an award for “Best Company to Work For” in the Asset Finance Connect Summer Awards.
As you can see, business finance solutions play a key role in helping small businesses overcome key challenges, expand operations and increase business growth potential. Millbrook is a one-stop shop for business finance and offers a wide range of solutions to solve almost any business issue and kickstart expansion plans.
By exploring these options, you can secure the necessary funding to drive growth and navigate the tough economic climate. However, selecting and securing the best business finance solution can sometimes be confusing, so our finance experts will search the market for you, ensuring you’ve secured the best rate available to you and do all the paperwork – freeing up your valuable time.
Learn more about Millbrook and the solutions we offer.
In conclusion, while the current economic climate presents numerous challenges for UK businesses, these can be overcome through savvy business decisions. By leveraging business finance solutions and adopting strategies such as diversification, innovation and improving digital engagement, your business can navigate these challenges and achieve successful growth.
Have you explored commercial financing before? See if you’re eligible for Millbrook’s business finance solutions. We’d love to help you supercharge your company’s growth!