SMEs account for 99% of Manchester’s business base, and employ 71% of its workforce. The city’s tremendous growth, productivity, and attractiveness to foreign investment all come from this strong base of independent tech, finance, manufacturing, and creative industries. Despite these promising prospects and Manchester’s heavy investment in the infrastructure that links them, many SMEs are still struggling.
Labour is expensive, and highly-skilled labour is in short supply. Operating costs for commercial property and energy continue to rise, and digitisation is proving difficult for some to adapt to. Though local councils and private capital groups have expanded their funding options, these complexities require strategic thinking across the business and are not necessarily fixed by an injection of cash. Outsourced finance teams offer the Manchester SMEs the resources and expertise they need to navigate the turbulent economic landscape.
All decisions are financial decisions
The ever-accelerating pace of technological innovation and the gradual lowering of entry barriers to commerce mean that SMEs face more competition than ever before.
In fast-paced markets like Manchester, business leaders are pressured to make the big decisions much earlier in their company’s journey than they otherwise would. They have to consider how the company structure will change with growth, funding options, which software they should invest in, and make calls on cash flow management before they even have a solid idea of how their performance compares, just to stay ahead of the curve.
Each decision, whether made at these early stages or well into a business’s lifecycle, carries hidden costs, and relying on guesswork makes them much more difficult to predict. A professional hand at the wheel can offer informed guidance through regular reporting and an in-depth understanding of both the company’s current position and broader market conditions.
Compliance is only a baseline
Most SMEs handle bookkeeping and payroll but treat them as required periodic processes, ultimately divorced from the day-to-day running of the company. As discussed, many industries within the city are moving at breakneck speed, and while understanding last year’s performance is useful, it lacks the adaptability and utility of real-time data.
Manchester accountants take a more active role in monitoring and reporting key metrics. Any founder can learn to navigate the UK’s Make Tax Digital framework and meet their mandatory commitments, but these are only the beginning. The active decision-making support provided by forecasts, debtor tracking, and scenario planning requires some form of external guidance.
Every SME faces its own obstacles
Some of the best-performing sectors in Manchester include digital creative agencies, hospitality, and life-science startups. The diverse nature of the city’s commercial ecosystem is at once a great source of strength and somewhat of a liability, as it means the core struggles each industry faces cannot be fixed with easily transferable information.
The sheer number of variables at play, including SME size, location within Greater Manchester, and liquid assets, means that while one start-up may need runway modelling aligned with its hyper-growth mindset, another would benefit from a triage of its stock and supplier portfolio. Companies in high-turnover markets, like hospitality, may need scenario modelling to account for peaks and troughs in available labour, meaning there is no single, all-encompassing solution a founder can turn to.
Navigating these industry-specific obstacles alongside broader economic forces often proves too much for SMEs and is indeed a reason many end up closing shop before they reach profitability. Outsourced finance and fractional CFOs offer an adaptable solution to Manchester’s small businesses, combining focused expertise with global insight on trade and geopolitics to predict roadblocks in advance. Leaders can make contextually aware decisions with greater comfort, knowing they have decades of experience in their corner.
Clarity that supports growth
SME leaders make important decisions every day, whether they realise it or not. Though adopting a new piece of software or leveraging an existing client to make up for a lack of new prospects may seem insubstantial and offer some immediate benefit, they can lock a company into a costly-to-recover-from trajectory.
Outsourced finance teams support decision-making by tackling problems from every angle, identifying inefficiencies and bottlenecks that act as invisible drains on profitability. They give leaders the clarity they need to price, hire, scale and invest at the right time, so that each step in their journey is taken with confidence and knowledge of what comes next.
