Lindsays provides top tips ahead of Small Business Saturday
Lindsays has outlined a series of measures it says can give small businesses a fighting chance of success, ahead of Small Business Saturday.
Kenny Gray, a commercial property partner at the firm with expertise in advising SMEs, has commented on the simple steps that small businesses can take to make them more resilient in the face of all the challenges and competition they face.
Mr Gray has outlined the following four areas which commonly lead to the failure of small businesses, but which with better planning could be managed without a business-ending outcome:
- Debt recovery: late payments and the failure to collect debt can cause a cash-flow problem which leads to the demise of a small business, but better payment terms and conditions and debt collection procedures at the inception of a business can prevent that problem from escalating
- Succession planning: small businesses, often started by one or two people of a similar age, find themselves with a problem when those people want to exit; a failure to plan the future of the business can lead to its end. Succession planning is much easier if it is done strategically, many years earlier, and can be the difference between a business continuing, and not
Compliance: Too often a major event such as a fire or the discovery of asbestos can spell the end for a small business with physical premises, but if simple risk assessment procedures are put in place at the outset and properly monitored then a catastrophic event need not spell the end of the business
- GDPR: New European data protection regulations have not yet had time to take their full effect, but the penalties for contravening GDPR are punitive, and in the case of small businesses the penalty for a serious breach could be enough to submerge it. Understanding GDPR and putting in place appropriate procedures before something goes wrong is imperative.
Mr Gray said: “It is important to communities all over Scotland that we recognise the role that small businesses play in our economy and society. They are not as well known as their large corporate peers, but their impact in terms of jobs and GDP is huge.
“Small Business Saturday has become an important vehicle to recognise this, but it is also a useful time to highlight the unique challenges SMEs face. Unlike larger companies, they can often be as close to a bumper year as they are to insolvency, and small businesses fail on a very regular basis.
“However, not all small businesses which collapse need do so. They can help themselves by putting in place some simple and cost-effective planning, which could keep a business afloat should disaster strike.
“We can’t promise that better planning will save an SME in trouble, but we know it could give it a better chance.”