SMEs clearly do not have the same budget to play with as large corporations, so they need to be very careful with which areas of the business they spend their money on to ensure growth and keep the company successful. Hear from our three experts about their top tips on where to spend your budget:
Nima Montazeri, CPO, Liberis:
SMEs are in a challenging spot. As the market evolves, they must keep up, and there are many business technologies that support SMEs in improving their overall productivity, efficiency and competitiveness. But making a choice as to which technologies to adopt and build an understanding in can create a dilemma, especially in the current economic circumstances. Ultimately, SMEs should adopt transformations that nurture their specific goals, helping to guide them towards the best technologies and ROI.
The FinTech industry is rapidly growing and for SMEs looking to improve their financing and grow their business, the use of embedded finance can offer a wealth of opportunities. Embedded finance is the fastest growing sector within the industry, with forecasts of the entire embedded finance ecosystem expected to be worth over US$7 trillion by 2030.
Embedded finance refers to a financial service that is ‘embedded’ inside a platform or application, which means that customers can access browsing, payments, lending and more – straight from the platform they’re using. This is something that is already normal in daily life. In fact, you’re using embedded finance every time you book an Uber or a Deliveroo, with the full customer process taking place in-app, from browsing to payment.
For business owners, embedded finance refers to traditional financial services, such as payments or lending, that are provided directly to them by non-traditional players i.e. not the usual high street banks. Again, this process takes place within a single platform and means being able to access capital faster and often on more attractive terms.
By using embedded finance services, SME owners can make decisions to financially sustain and/or scale their business. AI and Machine Learning have played a significant role in personalising these platforms, making the application process for funding more efficient. Embedded finance providers can also use this technology to swiftly identify the point of need for SME owners and offer solutions. This can be a tremendous relief for business owners who might otherwise risk rejection for finance or a halt in cash flow.
Business owners and entrepreneurs are in a unique position as they navigate the present market, thanks to embedded finance’s ability to supply a variety of financial services quickly. Common commercial challenges can be solved swiftly, and SMEs can quickly scale up by adopting the cutting edge innovation that embedded finance has to offer. For SMEs, it can be a great way to maintain business and get ahead of the curve, particularly as the current economy looks to recover.
Jamie Akhtar, CEO and co-founder of CyberSmart:
The biggest existential threat faced by SMEs in 2023 isn’t the cost of living crisis or the economic outlook, it’s cybercrime. Fifty-four percent of small businesses experienced a cyberattack in 2022 and the outcomes – ranging from large financial losses and reputational damage to being forced to close shop altogether – can be severe.
With that in mind, it makes sense that a key area SMEs should invest in is cybersecurity technology. However, with so many options available, that can be a confusing proposition, but it doesn’t have to be.
There is an increasing number of end-to-end protection tools on the market and, for SMEs, these represent great value and a way to consolidate their cybersecurity into one manageable package.
We’re in a period when many small businesses are looking to cut costs and cybersecurity is one of the first places they typically look. Obviously, this is fraught with risk, but end-to-end protection solutions give SMEs a way to consolidate and dispense with unneeded tools and expenditure, without sacrificing their security.
What does this look like? A good end-to-end protection service will usually include a way to complete cybersecurity certifications and build a good foundation, detection of threats and vulnerabilities, tools for protection, staff training, breach response services and, in some cases, access to cyber insurance.
This might sound like a lot but, often, these consolidated solutions are most cost-effective than the alternative. What’s more, they give a small business everything they need for proper protection, without the costs, in both time and money, associated with using tens of different tools, hiring an in-house team or calling in the experts.
Elizabeth Jenkin, CEO, Nimbla:
Small- and medium-sized businesses make up a large part of the UK economy – at the beginning of 2022, SMEs accounted for 99.9% of the UK and regions business population. What this boils down to is their importance to our economy is crucial.
One of the biggest challenges to business survival and success for SMEs is late payments. The detrimental knock-on effect forces many to close their doors for good, with around 50,000 businesses pushed into insolvency each year in the UK alone as a direct result of late invoice payments.
We know that alongside the ‘normal’ trials and tribulations of running a business day-to-day, SMES face additional and arguably unnecessary challenges around securing a steady cash flow, increasing revenue and maintaining profitability. Until now, there has been a lack of affordable and simple to use tools to assist. However, the long-term benefits to SMEs can be game-changing so, if business leaders are looking to invest in technology, high priority products should be those which address the issue of non and late payments of invoices, are simple to use and easily embed within existing cloud software.
For example, we recently launched Nimbla Sync, a one-of-a-kind innovative policy designed to prevent the risk of non-payment for up to 12 months. Nimbla Sync allows SMEs to monitor real-time customer risk insights to help grow sales, secure cashflow finance and reduce credit risk problems and bad debts. The unique technology pulls data points from a number of sources and using this alongside leading algorithms and real-time market trends, a score is then given to each invoice – giving SMEs a clear picture of the likelihood of whether individual invoices will be paid on time or are likely to default.
With protracted default, SMEs can make a claim before insolvency – whilst protecting trading relationships. All ensuring the funding and steady cash flow is available to avoid panic modeand – potentially – insolvency.
In essence, when it comes to spending the hard-earned pounds, technology which addresses a business pain-point, adds value to operations and supports growth should be a priority. Every SME will have its own individual needs, but there are some pressures such as late payments which impact almost all of us at one point or another and need addressing across the board.
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