Small and Medium-sized enterprises (SMEs) are a vital part of the UK economy. However, over recent months, there has been an increase in concern among business owners that they may enter insolvency because they can’t weather the looming economic storm.
According to MoneyTransfers.com, two in five established businesses are worried about insolvency due to the impending recession. MoneyTransfers CEO Jonathan Merry commented on the data:
“Many businesses have been holding on by their fingernails during the pandemic, hoping for a return to normality. However, with the UK now heading into a recession, it seems that those hopes are fading fast.
“Businesses can take some simple steps to insulate themselves from the worst of the economic downturn. For example, proactively managing cash flow and reviewing their outgoings.”
UK Economy Hinting at an Oncoming Recession
Many freelancers have SMEs as clients so the sooner they can show those clients how they can help them see the other side of the recession, the better.
The UK economy went down by 0.2% from July to September, and experts are cautioning that the nation is on track for its longest recession yet. With many businesses already feeling the squeeze, it is clear that the next few months are going to be very tough for SMEs up and down the country.
Many households are spending less as they worry about the future, which is starting to impact businesses. If people are cutting back on their spending, then it is only a matter of time before this starts to hit companies’ bottom lines – and freelancers’ earning potential.
Surviving the Storm
With the economic outlook remaining uncertain, SMEs must take steps to protect themselves from the potential fallout of a recession. Reviewing finances, exploring funding options, and seeking professional advice are all key steps that can help businesses survive.
Freelancers have to pitch clients with out-of-the-box solutions that could ultimately bring in more sales, keep customers loyal or alleviate costs. Consider the departments that companies may first make budget cuts in a recession: marketing, accounting and IT. But these functions still need to exist, so freelancers can come in and help out as and when needed.
By taking action now, businesses (and the freelancers they hire) can give themselves the best possible chance of weathering the economic storm and coming out the other side stronger than ever.
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