This week, it was announced that scores from the Barclaycard Payments’ SME Barometer jumped from 79 out of a possible 200 points at the start of Q2, to 95 points at the start of Q3. These results reveal that over a third – 36% – of SMEs share a positive outlook for their own business this quarter, up 15% versus Q2. Across all sectors, SMEs predict a 5% increase in revenue for Q3 compared to Q2, which grows to 14% over the next 12 months.
Businesses reported, on average, a 14% decline in revenue for their second quarter, compared with the first quarter. The drop was half as severe as the predicted 28% decline. This is truly encouraging; as the backbone of the nation’s economy, the recovery of SMEs is highly indicative of how the economic recovery of the UK will play out.
The latest feedback from the SME Barometer is very much what we have been seeing here at IW Capital when interacting with small and medium-sized businesses in the post-COVID economy. The current situation is, of course, a time of uncertainty but small enterprises are nimble and adaptive to their environment. It is no surprise to see that their optimism is growing.
For those businesses looking to push on and expand, there are a few options that can be considered in the current climate:
Private Equity
Sourcing growth capital from an investor, a group of investors or a fund can be a great way to raise money to invest back into your business, staff, research and development, and new markets to help see your enterprise through the COVID period. While it may seem scary to pitch to investors, everyone wants you and the business to succeed. In fact, many firms now have dedicated teams to help you through difficult periods, make financial plans and even help the business build important and strategic networks.
Crowdfunding
For smaller amounts, crowdfunding can help entrepreneurs kick-off with a small amount of capital raised through a group of retail investors on an investment platform. These are not guaranteed to work but for smaller companies, this can help in the short term.
Angel investors
Having a mentor or ‘angel’ can help new entrepreneurs gain valuable experience from the business community and raise money at the same time. Angels can help in a varied range of capacities, including helping to manage finances, introduce entrepreneurs to a network or other angels or investors, or can even take a passive role and be there for guidance if you need them.
There is not a one-size-fits-all model for raising money, especially during a pandemic, so look at all your options, build your own personal network, and make sure you know your business inside and out. Even when furlough and the CBIL scheme come to an end, there are options, so be sure to explore them and see which one fits your business best.
To find out more about IW Capital, or for more information on investment and non-executive opportunities, please speak to a member of the IW Capital team today on 020 7015 2250, or email info@iwcapital.co.uk
