Managing cashflow the top issue for small businesses right now
Managing cashflow is a top issue for the UK’s small businesses, according to a survey that we conducted. Decision makers at 150 UK small businesses were asked which issues are a priority for them in 2021. Managing cashflow topped the list as an area of focus for 44%, followed by recovering lost revenue (39%) and data security (37%).
Other issues that featured high on the list were brand building (27%), reducing fixed costs (26%), retaining customers or clients (26%) and lead generation (26%). Interestingly, complying with new legislation following Brexit was only a priority for 15% of small businesses surveyed.
Donna Torres, Director of Small Business and Commercial Operations at Xero commented:
“Strong cash flow management is the cornerstone of business health. We know that 65 percent of small businesses fail because their finances aren’t up-to-scratch. Still, it can be a real challenge to understand where your business stands and what it needs to do to improve – especially with external variables shifting so quickly.”
“Businesses that have made it this far have already demonstrated that they have all the grit and resilience they need to take on turbulent times. To help manage cashflow in 2021 business owners should review the finance tools they use, in favour of those that offer real time visibility and automate cash flow processes wherever possible. Whether it’s expense or invoice management, let technology handle it so you can focus on rebuilding your business.”
Our MD commented: “It’s no surprise that cashflow has become a major issue for small businesses. 2020 was a challenging year for most businesses, and sudden drops in income couldn’t always be matched by rapid cost decreases, which quickly affected cashflow.
“We work with a number of companies that market to small businesses and we are advising them all to focus their messaging around these key issues, offering helpful advice, insightful campaigns and inspiring case studies to help them bounce back in 2021.”
Our small business marketing survey was conducted in January 2021. 150 decision makers in UK businesses employing 2-100 people were surveyed online.