The CCO who stole Christmas  

(but had some great advice for SMEs heading into 2024) 

Many SMEs are under real pressure at the moment, our CCO Richard Murray outlines the key challenges, and it’s not a cheerful read. But he also has some excellent advice to help to mitigate those challenges going into 2024. 

The first and biggest issue is cash flow 

There’s an almost perfect financial storm that’s striking cash flow from all angles. We’re hearing from the Bank of England that interest rates aren’t going to be dropping down anytime soon, so the cost of borrowing will remain high. And costs are rising across the board – energy, raw materials, wage demands. All this means that people are carrying more debt and more businesses being wound up in 2023 since the last big crash in 2009. 

So how do you ride the storm? 

Look at your own pricing. Are you recognising these additional costs and passing them on when you can to your customers? Make sure you are forecasting your cash flow effectively to see the impact on your business and put a proper budget in place. 

Understanding your financial situation with your accounts in order to make better short term and long-term decisions is vital 

Our advice is to put in sensible projections on income and outgoings and see if you’re predicting that you will make a profit or a loss for the year. Check how much tolerance you’ve got in either of those scenarios to help you make timely proactive decisions if the picture doesn’t look good, 

Are you getting up to date information on the creditworthiness of your debtors? If you’re fortunate enough to not be experiencing problems, people in your supply chain could be. If people or clients are having financial difficulties, then having large amounts of money owed to you is going to be an increased risk in the next few months. Appropriate debtor insurance could help if you’ve got any wiggle room in finances. Could insurance protect the money that you’re owed to make sure that it’s coming in? 

Beware the knee jerk reaction of borrowing more. Today’s borrowing costs are not cheap and if your business isn’t viable in its current state – borrowing more won’t help. You’ve got to think about rationalisation and make some really tough decisions on how you could pare things back for the benefit of the business as a whole and the staff that you will be able to retain. 


Recruitment and Retention 

Another big challenge we are hearing about from SMEs in a range of sectors is the challenge of finding the right people with the right skills. If there’s a shortage in your sector, then you need to offer prospective employees a competitive package. That’s not just rewards but also making people feel valued and culturally aligned to your business. Gone are the days when people only checked the salary and annual leave before agreeing to a role. Today prospective recruits, particularly young people, care about ESG, hybrid working, technology and if you can’t provide a holistic package, they’re going to look elsewhere. 

We recommend that you make sure you have a growth plan and priorities that align with the kinds of people you need to recruit. Start early, give yourself more time than you might have done in the past to implement your recruitment plan to support your growth. And finally, retention is a huge part of the solution. If you have or even think you might have manpower issues, work hard to keep the people you do have. 


If you have any questions about the issues we’ve covered or need advice on tackling the challenges in your business as we go in to 2024 please get in touch. Richard Murray and the herd are always here for a no obligation conversation.