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With more businesses having gone insolvent during the last year than at the height of the financial crisis, Dr Deniz Yoruk discusses how to help keep your business afloat.
The Guardian has reported that聽. The latest figures from the Insolvency Service show there were 25,551 insolvencies in the 12 months from August 2023 to July 2024. That鈥檚 more than in the year from August 2008 to July 2009, when 25,186 insolvencies were recorded, a period that included the collapse of Lehman Brothers in 2008 followed by a recession in 2009.
Responding to the figures聽聽Research Fellow in SME Growth and Development at 探花直播's Centre for Enterprise, Innovation and Growth said 鈥淭his does not come as a surprise considering that we now live in a polycrisis since Brexit (2016) and the Covid-19 Pandemic (2020-2021), which have already put a lot of strain on the finances of many small businesses. The business environment is constantly exposed to demand and supply shocks, one after the other such as the cost of living crisis, energy costs, the Ukraine-Russia war, and floods in some regions. There are no concrete measures, policies or support systems that guide businesses through these multiple crises.鈥�
聽carried out at 探花直播's Centre for Enterprise, Innovation and Growth has shown that businesses whose growth is on the decline and face insolvency focus largely on market-related issues such as sales and marketing, lack of market demand, and high market competition. To gain a foothold in a very competitive market, they tend to prioritise lowering costs by pursuing economies of scale rather than developing a business strategy that favours human resource development, product/market diversification and innovation. They present a short-term approach in general instead of structured purposeful planning and end up addressing the surface-level issues in strategic areas.
Dr Yoruk urged SMEs to view the crisis as an opportunity for transforming their organisation. She stressed the importance of digital transformation in overcoming the new reality of polycrisis but said it has to be proactively supported by strategy and mindset transformations in their organisation. She said 鈥淢ost SMEs still do not know how to fully utilise new digital technologies for their overall business performance. At the Centre, we have developed an SME Growth Model called聽聽for businesses that aspire to make a radical change. Businesses who are interested can complete our聽PSP Diagnostic聽and get further information about the transformation model from us. We have helped many West Midlands SMEs in our Centre and we hope to do so for many more.鈥�
The 探花直播 City Business School provides consultancy for SMEs, runs the 12-week government-subsidised聽聽and conducts聽.