Avoiding a collapse - what should your SME do?

After a tight-fought election campaign, Australian businesses are on their way to recovering lost confidence from the months leading up to the voting weekend. The media strongly focused on the election battle instead of business, which led to a decline in expected profitability and sales figures.

However, now that the election is over, the media will be turning its attention back to the business landscape.

"I can report that, based on the advice I have from the party officials, we can have every confidence that we will form a coalition majority government in the next parliament," said Prime Minister Malcolm Turnbull to ABC News, as reported by Smart Company.

Keeping the current Prime Minister at the helm could also be good for stability heading forward - especially after the volatility that Brexit is bringing with it from the Northern Hemisphere. Being financially sound in every respect is going to help businesses to push through hard times, and having available working capital is the best way to achieve this.

So, with the election on the back burner of media interests in the coming months, businesses should be looking at ways to avoid falling into the trap of losing money and eventually failing. There are some practical ways to avoid toppling, too.

How many SMEs fail each quarter?

Dun and Bradstreet Australia report that there were 13,023 failed businesses in the first quarter of 2016. That's a figure up by 5.2 per cent compared to 12 months earlier, and 7 per cent based on figures from the last quarter of 2015.

Typically, Q1 failures are the second-largest data pool over the course of a financial year, with Q2 being the lowest and Q3 the highest. However, the latest figure is significantly up from the 11,500 failed businesses from only two years ago, and could be spelling out an alarming trend.

If businesses of all sizes continue to fall over when extenuating circumstances arise around the country, the diverse environment that SMEs create in Australia may well come to an end. It's vitally important that business accountants and owners continue to look at ways they can propel companies away from the bottom end of the barrel.

What are the best ways to achieve success?

According to a Smart Company report, financial distress is one of the primary factors in business failure. To make sure you aren't dramatically affected by a lack of funds, it's important that you don't ignore the problem, and instead take active steps toward a solution and seek professional advice.

One of the sources of this is Earlypay. The team has years of experience behind them, and can also offer invoice finance as a way to shore up some cash flow to help keep away from the edge of defeat in the business world.

Smart Company also details the need for SMEs to remain relevant in a changing landscape. There are always new technologies coming to the fore that are making tasks easier and more efficient, but is your company making the most of them?

Further, in a country where innovation is one of the main drivers of success, is your business leading the way to change, or just following the rest? If you're in the latter group, think about ways to change your approach. Constantly playing catch-up with the other businesses in your industry will always put you at a disadvantage, but if you're innovating for others to follow, you'll be in a very safe place.

There are some very practical steps to ensure you don't fall by the wayside and become just another number in the tally of failed businesses for the rest of 2016, so what are you doing about it?

If you're seeking advice, get in touch with Earlypay today to find out more.

If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].