In response to rising business insolvencies[i], and trade credit insurance payouts at their highest since 2009[ii], Purbeck Insurance Services, the UK’s only provider of personal guarantee insurance to the directors and owners of UK SMEs has prepared top tips for SME survival.

Todd Davison, Director at Purbeck said: “Running a business is a worrying business at the best of times.  The financial burden is often shouldered by the directors of SMEs who have put their personal assets on the line.  In a survey last year among 250 UK business directors nearly half (44%) said they had a Personal Guarantee in place to secure finance for their business.  While Personal Guarantee Insurance can help protect a director’s personal assets in the event a loan is called in – business owners should seek help and advice before they face that situation. At Purbeck Insurance Services this type of support is part and parcel of the insurance cover we offer – we want our customers’ businesses to survive as much as they do.”

Purbeck’s SME Survival Tips

PLAN: Take time to generate a business plan to identify your core values and how you differentiate your business from competitors. Be mindful that things don’t always go to plan and it will evolve over time. Diarise to revisit the plan every 3 months to benchmark your progress and update your plans as necessary.

• NUMBERS: Keep close to the numbers, take time to monitor cash-flow and budgets. Consider using an external advisor such as an accountant to help. There are online cloud based accounting solutions that link to your bank account; providing real-time financial oversight and control.
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• EFFICIENCY: Focus on the tasks that add-value to your business; put yourself in a position so that the business gets the best out of your capabilities and skills. Consider delegating certain tasks.
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• KEEP CALM AND CARRY ON: You can often be faced with difficult or emotional decisions – don’t be rushed into a decision; take time to consider the alternatives and be positive in your convictions.
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• WELLNESS: Don’t lose focus on why you get up in the morning and try to maintain a proactive work/life balance. Spend time with friends, family, eat well, exercise and recuperate. Wellness and maintaining a healthy mindset can help to make you a more effective director of your business.
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• DIVERSIFICATION: Reduce your reliance on any one revenue stream or customer. Seek ways to access alternative income and from multiple sources.
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• ORGANISATION: Put in place robust processes, governance and oversight measures to control your business and its growth.
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• ASK FOR HELP: Don’t be afraid to seek professional advice if you are outside of your comfort zone; many advisors are there to help you make informed decisions to work towards your strategic aspirations.
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• Personal Guarantee Insurance offers protection against the risk that the Guarantee is called by a lender and will offset any outstanding obligations called in under a Personal Guarantee. The level of cover is based on a fixed percentage of the Personal Guarantee the company director wishes to insure and this is dependent on whether the corresponding finance facility is secured or unsecured. 

[i] Source https://www.consultancy.uk/news/20765/number-of-uk-insolvencies-booms-by-20-over-three-year

[ii] https://www.abi.org.uk/news/news-articles/2019/03/bad-debt-britain---payouts-to-help-uk-firms-survive-unpaid-bills-now-at-their-highest-since-2009/?utm_source=mailshot&utm_medium=email&utm_campaign=&utm_mailshot=511ea490-286e-43ed-9584-df7a46907426&utm_action=click