Last year, many SMEs set themselves on an upward growth trajectory ‘ one that can continue throughout 2022 if they embrace agility and look ahead.
Despite the economic uncertainty of the last two years, 83% of UK businesses say they met or exceeded their growth targets, according to our 2021 State of Growth report. In conversation with our SME customers and prospects, I can see many on an upward growth path. The outlook for entrepreneurs and growing businesses appears strong, but their adaptability will be critical in a year that will bring continued change.
These are four steps growing businesses can take in 2022 to help them thrive and drive long-term success.
Plan for the unexpected
The uncertainty of the last two years has seen a focus on short-term decision making, as businesses shift and react to an almost constant stream of unexpected challenges, such as worker availability, inflation, worker availability, and international trading.
To become better accustomed to fluctuating conditions – a situation that is unlikely to change in 2022 – a shift to longer term planning is needed. Set long-term goals but create strategies that bring the flexibility needed to adapt your business model and resources and to maintain positive cash flow.
Reviewing workflows and technology will be important. Too often I meet great businesses that are being held back by entry-level systems that can’t scale and manual processes that cut into performance and profitability.
Easy access to real-time data from across the business is needed to give leadership teams the visibility they need to respond quickly to a changing market, operate efficiently and make informed decisions.
Gain greater control over cash
Cash flow is one of the most important indicators of financial health, but do you have real-time visibility of your cash reserves? If not, make this a priority; controlling the money coming into and out of your business will help you determine your ability to adapt and take advantage of new opportunities.
Centralise standard financial processes and automate them as much as possible, freeing up your bookkeepers, accountants, or CFOs to focus on financial planning. Having teams of people monitoring transactions, interacting with banks, carrying out month-end or reconciling payments is time spent that a growing business can ill afford.
2022 will see positive developments for SMEs in this area, as financial technology becomes more tightly integrated with business management tools used for resourcing and finance. Look out for business tools that embed international payments and expense management into a central solution through integrations with banks, which can help take the complexity out of accounts processes such as managing multiple foreign bank accounts.
Get productivity in check for good
The location of the workforce is front of mind with businesses of all sizes, with our research revealing that 50% of workers expect to be remote more than half the time post-pandemic.
It’s unlikely that many businesses will be able to dictate a full-time return to the office environment given these worker expectations. A strategy to motivate and empower employees needs to be a priority in 2022, as engaged employees are likely to invest more discretionary effort, progress faster, and stay longer.
Technology can play a big role in driving employee positivity, productivity, and collaboration. Small business advisers Enterprise Nation found that UK SMEs are wasting around 150 hours each year (the equivalent of £8.1 billion) due to an over reliance on manual processes. Providing tools that encourage knowledge sharing and help speed up processes through a centralised, cloud-based platform is a must.
Start with the right foundations
Around half a million new businesses were registered in the UK during the pandemic, according to Companies House. If you are one of these then you likely have an advantage over businesses that are more established – setting the right foundation to be flexible and scale from year one.
Even with the very best business idea you won’t go far without a clear view of your business and its financial health. A centralised business management platform will help give you clearer visibility on every aspect of your operation, from sales and customer engagement, to finance and staff, with the right controls and processes.
It’s time to accelerate growth
Now is the time for SMEs to get ahead and take steps to drive efficiency and productivity in 2022. Whether you are just starting out, moving to the next stage of growth or funding, or looking to expand and scale, 2022 brings the opportunity to accelerate operational and financial performance.