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Adapting your approach to finances for growth

Written by Martin Hyde on Friday, 04 June 2021. Posted in Growth, Financial management, Finance

Agility. Pace. Dynamism. Three attributes which have long been associated with the most successful small businesses and three attributes which have been vital over the last 18 months.

Adapting your approach to finances for growth

Agility. Pace. Dynamism. Three attributes which have long been associated with the most successful small businesses and three attributes which have been vital over the last 18 months.

Against a landscape of rising competition, market uncertainty and changing customer expectations, today’s SMEs find themselves in a very different world than they did in 2019. Throughout the pandemic, disruption has acted as a catalyst for change, with many small business owners having found new ways to navigate the endless challenges, with many examples of diversification through new online sales channels, click and collect options and, in some cases, the inception of brand new businesses.

For any small business, having a sound understanding of your financial position, making quick decisions and pivoting operations accordingly is an imperative to withstanding change. This ability is what sets businesses apart and can give you the best chance of success in the long run; but this relies on having real-time, easy to understand financial data at your fingertips. 

A recent HSBC UK survey showed that less than a third (31%) of UK SMEs felt completely confident in their ability to stay on top of their finances in real-time, with a further 40% admitting to struggling with at least one aspect of managing them. We know our customers are innovating and adapting at pace, and British businesses tell us that through these uncertain times they need their bank to be flexible, provide quick access to funding when they need it most, and to support future growth opportunities. 

As businesses look for growth, the following tips could help you to stay on top of your finances so you’ll be ready to grasp every opportunity. 

Manage your cash flow, access to cash is what enables you to act on new opportunities or diversify your offering and innovate to find new customers or new ways of doing business. Categorised spending can help you understand where your money is going so you can also help you to set budgets and goals. 

Get insights on how and where you are spending, allowing you to not only keep track of your expenses but to use those insights to make quick decisions and pivot your operations accordingly. 

Go digital - the accelerated use of technology in response to the pandemic has created opportunities for greater efficiency, responsiveness and the ability to make financial decisions on the go. 

Get to know your customer. Asking the right questions can provide essential learnings, insight and potential growth opportunities for your business. 

Anticipating future needs and acting quickly. We know that keeping up with customer demand is important, but being able to predict what’s coming next is what can set you apart

Choose a banking partner that can support your business - SMEs need an agile, flexible, and responsive banking service that empowers small businesses to make quicker, more informed decisions on their day-to-day financing from wherever they are. 

Where to go from here

As we traverse the road map to a more open UK, businesses are looking forward and thinking about what comes next. Recent data from the Office of Budget Responsibility has forecasted a “swifter and more sustained recovery than expected” - six months earlier than originally thought, by mid-2021. It is reasonable to hope the second half of this year could be a bridge to normalcy. 

That doesn’t mean the effects of 2020 won’t still be felt and many small businesses will continue on their journey to recovery. As we emerge, the most important thing is for businesses to keep talking to their bank, whether that be about these simple measures, what to do next, support to grow their business internationally or investing for growth. 

As the uncertainty fades, SMEs should start taking a more long-term approach to financial planning ensuring they are ready to benefit from the economic rebound. 

About the Author

Martin Hyde

Martin Hyde

Martin Hyde heads up HSBC Kinetic, a mobile banking app for SME’s. He has worked within the Business Banking space undertaking a variety of customer facing and Product roles across major UK banks. Martin has worked on the HSBC Kinetic proposition since it was being developed as a concept in 2018, designing and leading the implementation of a variety of products. He has headed up HSBC Kinetic since July 2020.

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