In the current market place SMEs are generally pulled from pillar to
post with commitments from the financial to the ethical, the
environmental to the commercial.
Most SMEs survive and thrive by
spinning all of these plates particularly well and ensuring all aspects
of their business work in harmony and towards a common goal. The most
recent concept being brokered by the business community is that of
employing workers on a living wage.
Following a recent poll 64% of
business owners questioned backed the idea but saw it as an
aspirational goal and usually not one that is immediately achievable.
Anyone successful in business knows you are only as strong as your
weakest link so when a business has great employees it is hugely
important that they feel valued and justly rewarded. It is in the
interest of the business to try and retain them and inspire loyalty,
being an employer who pays the accepted living wage is just one way to
do this.
Funding in business is a balancing act taking loans or
funding that, in the long run, will benefit the business and show a
return on the initial co
st usually through investment in growth and
sustainability. SMEs have more funding options than ever to try and
achieve this balance, with funding enabling businesses to attain the
living wage accolade amongst their other business aspirations.
Below is a list of what is seen as the top 5 funding options for SMEs in the UK.
Traditional
Bank Loans - Generally less flexible than some other forms of lending
but still a viable option for most in the current climate.
Asset
Based Finance and Invoice Finance - The fastest growing form of funding
with SMEs, generally it is flexible, reliable and sustainable. With
short term contracts now being offered this is an option that many SMEs
are using as an interim growth tool.
Friends and family - Quite
often a quick, low hassle option in comparison to some other forms of
lending however it should be considered that having a more diverse
shareholder base can often lead to strained relations should the
business not succeed as planned.
Crowd funding - Crowd or "peer to
peer" funding, where groups of people pool their finances together to
fund a business venture, is becoming increasingly popular but relies on a
good network of business links to work together.
Private equity -
This is usually available to businesses in a very strong financial
position with good potential for growth. This is generally a more
expensive option as an investor would usually look for board
representation and sometimes a majority equity position.
It seems
that the responsibility of employers towards their staff is once again
in the spotlight; businesses that succeed in the future will take heed
of societies demand for social responsibility and for employers to
inspire aspirational values and support employees in being financially
independent.
In reply to the initial question "Can SMEs achieve
the Living Wage aspiration...?" I believe in time the answer will be "We
need to in order to succeed". Employee expectations are higher than
ever and in the extremely competitive market place it is more important
than ever those businesses attract the right employees for the job. It
is generally accepted (though not proven) that if people feel they are
remunerated fairly and paid a living rather than a minimum wage for the
work they do they will work harder and be more reliable, so for SMEs to
grow their business, support their employees in this way and by
extension wider society, more may soon look for alternative business
funding options such as those detailed above.
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