30 Sep Post Recession Problems and How To Overcome Them
Post Recession Problems and How To Overcome Them.
The recession is over according to economic commentators but have you really felt the benefits of an expanding economy? Are your SME businesses finally enjoying an upswing in economic activity? Well here is the interesting thing, most of the small and medium business owners I talk to are saying that business is not much better than it has been over the last 5 to 7 years, with the exception of some temporary spikes that have proved to be unsustainable. Yes, there are some exceptions and some SME businesses are doing significantly better than in previous years but the positive upswing is not widespread enough to sway significant new investment in small and medium businesses as a whole.
Many SME businesses, which have seen an increase in sales, are saying that it is largely attributable to pent-up consumer demand. Long postponed purchase decisions cannot be postponed any longer and this is pushing up sales in specific areas and consequently sales tax receipts are on the increase, giving lie to the idea of a buoyant and sustainable growing economy. However, there is still a sense of apathy and caution prevailing. There is still a mindset of survival above everything else. Fear and caution are still the predominant emotions.
Even SME business owners who see new opportunities on the horizon are still feeling that capital is not as accessible as it used to be and that banks and state agencies are slow to get behind their plans to invest capital in their businesses. Perhaps it is just too difficult to tick all the boxes for these external providers of funding. Maybe the businesses are not generating sufficient capital to self-fund new projects or initiatives without external support or contributions. It becomes a classic Catch 22 situation for some businesses. "I cannot get funding because I haven’t got enough of my own capital to put in and I cannot generate more capital because my growth capacity is limited due to insufficient financial resources"
Business owners are also concerned about having to pledge personal assets, including family homes, as security for business expansion loans. This is very understandable as banks, and the vulture funds to whom the banks have sold large parts of their loan books, have become increasingly aggressive in selling assets and calling in personal guarantees that can put business people and their families out on the street or into involuntary bankruptcy.
Click on the link below right now to access the full blog article on this topic and to learn more about what is causing SME businesses to stall and the steps their owners might take to improve their situation..