Resilience v4.1

Don’t Bank On it
6 min readJul 5, 2022

To say the last few years have been challenging for UK SME’s would be a flat out understatement….

Despite their resilience, and incredible survival instincts one crisis has immediately followed the last, offering no chance for business owners to pause for breath and think much beyond bunkering down and getting through to the inevitable next big challenge.

Acceptance that uncertainty is a certainty and volatility is the new normal is now the necessary default for business owners when trying to navigate the headwinds and plan for the future then.

Many SME’s emerged from the pandemic and the subsequent lockdowns with reduced revenues, significantly higher debt burdens, eroded balance sheets and less cash. For many their survival has only come at the cost of having to take on more debt, sell off assets, cancel investment plans restructure operations and tamed growth ambitions.

Putting economies so closely integrated and interwoven into a state of uncoordinated suspended animation led to huge supply chain disruption, and with billions in fiscal stimulus aimed at propping up demand where supply was hard to come by, price rises were the inevitable consequence. As countries re-opened and demand bounced back supply of many raw materials and particularly oil and gas was hard to come by. With businesses themselves facing higher costs.. Prices went up.

Prices were rising then even before Russian invaded Ukraine, and the thought that inflation would be transitory, calming down as supply chains readjusted became detached from reality the moment the war started and the West responded with Russian sanctions. Food and energy prices surged, and unable to hold prices steady after two years of struggling through the pandemic most business responded in kind.. Prices went up.

SME’s are now staring into a cost of living crisis that will weigh on consumer spending domestic consumption, investment and trade. They face it down against the backdrop of inflation expected to hit double digit percentages by the autumn, increased borrowing costs as interest rates rise and supply chains that continue to be disrupted where many raw materials and goods are hard to come by.

…..So Game Over then?…. Not so at all… SME business owners have proven time and time again to be the most resilient, adaptable and innovative in the face of crisis. Yes there is no question we need to ensure a strong framework of support is in place to enable businesses the confidence to invest, innovate, develop future skills, and to trade without friction, but even where this might be lacking we should never underestimate their ability to turn a crisis into opportunities.

Whilst we must not downplay, ignore or gloss over the challenges facing SME’s, its clear that business owners that burry their heads in the sand and allow the crisis to “happen to them” will not survive as the headwinds grow and uncertainty increases.

Whilst there is no one size fits all survival framework, there are steps that business owners can take that will place their ability to respond to challenges more on the front foot. Having been privileged to work with so many amazing entrepreneurs and owners over the years, there are some consistent themes that those that have been most successfully adapting to and thriving in a crisis do:

Be clear in the vision…

Three simple questions every business owner should ask irrespective of what is happening around them…..Where am I now? Where do I want to get to? And what do I need to do get there? The macro environment and day to day pressures will continue to shift and the world we are in today will look very different to the one in a years time, so having the vision to prepare for that now despite the challenges will create a sense and culture of purpose within the business leaving it more likely to excel in the new economic environment whatever that may look like.

Focus on cash…

The obvious perhaps, but taking a much more hands on approach to managing the working capital cycle whilst strengthening the relationships with customers and supplies becomes more important than ever. Business owners will be required to make decisions more quickly as they seek to respond and react to fast changing circumstances.

Visibility is all about seeing and understanding the elements of the business that can impact on its cash position:

  • Who owes money, and for how long has it been outstanding for?
  • Who do you owe money to and how quickly it needs to be paid?
  • How much stock do you hold and how quickly can it be sold?

SME’s need to be razor focussed on credit control, identifying early where issues might arise from clients paying late or at risk of not paying at all. Diversification from both a customer and supply perspective is crucial in a crisis, as being reliant on a small few might be ok in benign times but during uncertainty options and spread matter.

Most importantly SME’s should be asking the I really know what’s going on with my clients or suppliers? Are they struggling for cash themselves or finding it difficult to secure supply, and how will that play out for my own cash flow. Looking along and across the supply chain and understanding where the risks lie will allow business to better scenario plan.

The importance of Scenario Planning…

Its probably safe to assume, that assuming what is happening today will be not be what happens tomorrow, so the “What If?” questions become more important than ever to help businesses owners to plan and respond accordingly. During a time of crisis it is easy to fall into the trap of becoming tunnel visioned, but by taking a step back and looking at ways in which the business might be impacted on the horizon both financially, operationally and from a people perspective will allow it to create resilience.

Scenario planning can feel daunting and particularly when the business is in day-to day fire fighting mode, but it need be no more complicated than:

  • Identify the challenges and risks that might lie ahead (For example reliance on a concentration of customers or suppliers.
  • Quantify the impact that these will have across the business both financial and operationally.
  • Mitigate the impact through considering and creating options that enable the business to respond to the risks accordingly.
  • Respond- Once a business understands its risks both short and long term, it places itself in a much better position to respond proactively and with purpose, minimising the potential impact from the risk occurring or even eliminating it happening altogether.

Create a platform based on agility and flexibility…

Accept that what were ones established processes and role profiles will likely need to change, and so building multi disciplines and skills across teams will help the business respond at pace to uncertainty and change. Where costs become an increasing challenge for most businesses, having people and teams that are multi disciplined and able to learn new skills quickly will not just support survival in the short term but help foster a culture of innovation and creativity for the future.

I have always felt incredibly privileged to have had a front row seat for so many years working with amazing SME business owners and entrepreneurs, and despite the headwinds we are facing into have no doubt that their tenacity, resilience and ability to adapt to crisis will see them through.

No one should need reminding as to the importance and necessity of having a thriving SME space. Our future growth and employment prospects are dependent on it. More than ever we need to find ways then to support business owners to not just survive but thrive into the future….

For business owners they must remain resilient and know they can always influence their futures through acting with proactivity, purpose and vision.



Don’t Bank On it

Impatient/Inpatient Banker, first principles thinker and Fintech nerd with a passion for SME’s, technology and innovation..