Finance remains greatest barrier to small-business optimism
Photo Credit: Graeme Darbyshire via Compfight cc

Optimism among small-business owners is still being suppressed by concerns about finances, according to the latest Owner Managed Business Barometer from Bank of Cyprus UK.


The report – the second in the bank’s newly created OMB research strand – shows improved conditions when compared with the previous instalment.


However, the overall ‘confidence index’ remains negative, at -0.41, and only companies’ confidence in their sales and revenue scores positively among the sub-indices that are factored into the report.


In all, the breakdown looks as follows:


  • Finance and Cash Flow: -0.81
  • Sales and Revenue: 0.25
  • Employment: -0.36
  • Economic Outlook: -0.71
  • Overall: -0.41


Interestingly, the figures show that cash flow trumps even concerns about the economy as a whole, indicating that business confidence’s greatest obstacles at present derive not from macroeconomic conditions, but from the difficulties faced by individual firms and managers on a daily basis.


This demonstrates the importance of managing your own finances effectively – particularly in small and one-man businesses, which may be less capable of withstanding financial shocks.


Good credit control can help to make sure that, if you deliver goods or services before taking payment, you do not expose yourself or your company to unreasonable amounts of client credit.


Pursue payments promptly when they become overdue – and take even more proactive moves to help reduce the number of invoices that go unpaid by the time their deadline arrives.


Together, this should all help to more closely align your cash flow with your sales, and could help to narrow the gap between business-owners’ confidence in the two distinct areas, by the time the next industry report is compiled.

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