According to the Bank of England, lending to businesses fell by £5 billion in the first quarter of this year. With bank lending down, SMEs across the country are turning to the cloud in a bid to boost growth without large overheads.
In times of austerity SMEs find themselves in a difficult position. While there is a continual need for investment, lending to businesses is down. The European Commission found that SMEs saw ‘access to finance’ and ‘finding customers’ as the most pressing problems. Despite these challenges, there is opportunity for SMEs to succeed and grow provided they find the balance between investing in technology and scaling back expenditure.
For growth to be sustainable it needs to occur at a steady, manageable pace. If growth comes too quickly weaknesses in cash flows, manpower and customer service can be exposed. As a result, businesses may find themselves unable to maintain their customer base or attract new customers. However, if growth does not occur quickly enough a business may be in danger of stagnation and will find it difficult to meet significant growth targets.
In order to hit growth targets, many SMEs are looking to streamline their IT operations.
A recent European Commission report found that the adoption of cloud computing could result in 80% of organisations reducing their costs by 10–20%. This is clearly a trend that SMEs are beginning to see as the Cloud Industry Forum predicted that 98% of UK SMEs will adopt cloud services over the next few years. Time and money saved can then be invested in other critical areas of the business, allowing SMEs to focus on their core expertise to drive top line growth.
Small businesses can also benefit from the continual upgrades offered through cloud-services, allowing them to have immediate access to the latest technology without the need for further investment in their own IT infrastructure.
In fact, recent research from the Federation of Small Businesses found that investment in technology was a driving force of innovation for small businesses. As SMEs begin to embrace the cloud for future growth, businesses will need to have confidence that their existing IT services can grow with them and without the worry of further investment.
Small businesses, especially those in their infancy, are often not able to invest time or resources in expensive or complex IT services. However, using cloud-based technologies allows systems to be scaled up or down on demand and in line with the needs of the business.
Cloud-based services allow SMEs of any size to build a customised IT solutions package that is suited to their requirements while still providing the flexibility to grow as the business does, allowing them to consume technology services on a pay-as-you-go basis.
While controlling costs is key, SMEs also need to consider new ways to expand their operations overseas. For businesses planning to grow from a single location to a larger, multi-location organisation, or expand internationally, cloud-based services allow SMEs to grow with ease, allowing employees access to services from any locations without large overheads. SMEs of any size are then well-placed to compete with bigger companies globally.
Smart business people know that growing too fast can be as dangerous as a painful slowdown. Planning for growth is as important to delivering success as convincing new customers to do business, especially when financial support from banks is difficult to come by. This is why small businesses must ensure they have systems in place which can grow with them, at their pace.
By using cloud-based IT solutions, services can be scaled up or down on demand, and SMEs can enjoy the flexibility of only needing to pay for the resources they require at the time they need them. The benefits offered by cloud-based services are ideal for enabling small business to position themselves well for future growth. Indeed, with cloud-based IT services, the sky is the limit for SMEs.