Why should SMEs be surprised at their growth?

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The latest report from the Close Brothers Business Barometer has revealed an interesting difference between the number of SMEs that forecast growth and the real statistics in UK business.

According to the findings, not even half (43%) of SMEs quizzed 12 months ago predicted that they would experience growth over the coming year. The reality, however, is that 67% of them have done just that.

While any news of small companies performing better than expected is to be welcomed, these stats do beg the question of why business owners tend to downplay their own chances. Is it possible that businesses could become even more profitable if directors were to anticipate growth rather than be taken by surprise by it?

Conservative estimates

Perhaps it’s simply a case of companies exercising sensible caution. We’ve talked before about the importance of setting both break even and stretch budgets so that you can revise the amount of money you have to work with depending on how the business is performing.

Many business owners prefer to get into the mindset of having a difficult year ahead, thus meaning that any growth within the company can be taken as a bonus

Gaining from growth

This is all well and good, but companies that experience growth should not rest on their laurels. Sometimes, growing too quickly or against expectations can pose problems for business decision-makers, as it can leave them unsure on whether or not they are actually riding a continuing upward trend, or if they are simply enjoying a one-off spike in business. Such uncertainty can leave directors unsure of whether to hire new staff, move to larger premises or bring in new equipment.

It is therefore wise to anticipate growth and come to a statistically backed conclusion as to whether your business is likely to grow, and what the next step should be if it does.

Help from outside

The UK is a hardworking nation, boasting some of the best business brains and entrepreneurial minds in the world, so company owners shouldn’t be surprised at their success. The best way to make an informed decision on whether or not your company is in a position to grow is to closely monitor accounts and set strategies based on them.

Time and expenses within the business can be freed up by hiring an outsourced accountant to maintain and analyse the books, and consult any visions they might have for the direction of the company.

That way, growth can be both predicted and achieved, leaving you in a better position to build upon it rather than simply react with surprise.