6 Challenges Facing Small Businesses in 2018

Any business owner operating a small business, knows how time consuming, difficult and stressful it can be to grow in changing times.

With 2018 set to be another challenging year for small businesses, managing volatility and facing challenges will be a skill all business leaders need to nurture. The comforting aspect is you’re not alone. Other business owners are experiencing the same issues as you.  When you understand the challenges,  you can take action by setting up the systems and processes, or seek help from the right professionals, to solve these problems before they even happen.

Our long term experience working with small businesses has helped to identify the most common and time consuming challenges that are, or have been, bothering our clients recently. Clearly, there are numerous challenges lurking in small businesses but we’ve boiled them down to the top 6.


There are many issues facing business owners such as Brexit, access to finance, changes to pensions and many more, but remember the date May 25th 2018. This is the day when the European General Data Protection Regulation (GDPR) comes into force. This legislation will replace the current Data Protection Act.

What does GDPR mean for your business?

All businesses, big or small have to comply with the new regulations regarding the secure collection, processing, storage and usage of personal information. The objective is to improve rights and protect personal data.

With no transition period leeway and large fines for non-compliance, this is not the time to put your head in the sand. Despite Brexit looming, UK companies still need to comply with this new regulation with confirmation that the UK will mirror the GDPR post Brexit.

Read ICO definition of personal data means here.

6 principles of GDPR

The company data controller is responsible for, and needs to be able to demonstrate, compliance with all these principles:

Personal data should be:

  1. Processed lawfully, fairly and in a transparent manner
  2. Collected for specified explicit and legitimate purposes
  3. Adequate, relevant, and limited to what’s necessary in relation to the purpose
  4. Accurate and where necessary, kept up to date
  5. Kept no longer than necessary
  6. Processed ensuring appropriate security

Choose which of these lawful bases for processing personal data is most appropriate to use depending on your purpose and relationship with the individual.  You will need to justify the reasoning so ensure you record this in a policy document.

Where do I start with GDPR?

The ICO has produced some very useful and clear guidelines and documents on their website explaining GDPR in greater depth. Reviewing the information from the official source will help weed out the conflicting information from various companies on the subject.

Start with the below documents:

12 steps to prepare for GDPR

Guide to GDPR

CMC Partners are business advisers not GDPR experts, we simply wish to raise awareness of this looming regulation to business owners. We encourage you to seek guidance from ICO and/or legal advice, if required.

2. Cash Flow

For small businesses cash is the lifeblood to keep daily operations running. Too many business owners struggle to manage it effectively or recognise the importance.

‘92% of business owners surveyed experienced problems from time to time or consistently.’ CMC Partners Survey 2016

It is normal to have cash flow inconsistencies but being in control is essential not only for the health of your business but to free up some of your time to focus your attention on managing and growing your business.

Tips for Cash flow Management 

To minimise the impact of peaks and troughs, download our Cash Flow Whitepaper here.

3. Underperforming Staff

Most businesses at some point in their business journey experience issues with an under performing employee. Informing a member of staff that they are under performing can be a daunting prospect. You may be one of the many owners who dislikes and even avoids this conflict but unresolved it can be poisonous for your business.

We are working with various owners currently to identify and resolve these type of people issues within their business.

To start, you need to ask yourself some key questions:

  • Have you made your expectations clear?
  • Has the employee had sufficient training?
  • Is the workload too high?
  • Did you hire the wrong person for the job?
  • Are their personal issues affecting the employee?
  • Is the communication effective between the person and the team or manager?
  • Have you considered motivating factors ?
  • Is there another role which the person would be better suited to?

Once you have considered the above, a plan of action for improvement can be implemented.

Failing the above then you will need to follow the disciplinary process. Meanwhile the employee may well come to the conclusion that it’s not working out for them and hand in their notice.

Determining what resources are required in terms of people and skills is key to growing any business. In our experience of working with business owners, most encounter problems when it comes to hiring the right people. To help guide you through this process, download our Growing your Business – The People Dimension

4. Too hands on

A remarkably common issue amongst business owners is being too ‘hands on’ with running everyday operations. Owners are having to focus on the day to day running of the business to such an extent that thinking about managing and growing their business is neglected.

This approach leads to the owner neglecting the overall strategy and their personal objectives, causing detrimental effects.

What can you do about it?

Stand back, review the situation and focus on managing and growing your business. Hire, delegate, lead and motivate your team. This will free up your time to focus on the key aspects to  successful growing your business. Read more here

5. The Right Systems

All businesses produce and rely on large volumes of information – financials, customer data and interactions, employee details, regulatory requirements and so on. To be efficient and effective, the right systems are crucial to business growth.

Responsibilities and tasks can be delegated as your business grows. However this does require solid management information systems to manage effectively. The larger your business grows, the harder it is to share information and work together effectively. Putting the right infrastructure in place is an essential part of growing.

Documentation, policies and procedures also become increasingly important as more employees join your business. Gone are the days of surviving on spreadsheets or filing on your desktop as customers and employee grow in numbers. You need proper contracts, clear T&Cs and effective employment procedures.

Investing in the right systems early on will certainly pay off both short and long term through efficiency.

6. Overvaluing your Business

As a business owner, exiting or selling your business is personal since you have worked so hard over the years to nurture and build it.  This emotional attachment often leads to owners overlooking flaws and overvaluing their business. Of course, there is no harm of thinking well of your business, unless you wish to improve its profitability or plan to sell it.

Taking a step back to view your business as a potential buyer would see it will help you succeed in building real value in your business.

Developing a personalised and achievable exit strategy will help shape your business and maximimise the value over the years, allowing you to exit at a time of your choosing.

CMC Partners specialise in Exit Strategy development and selling businesses. We help owners realise the full potential of their business whilst maximising its sale value. If you would like an initial conversation or realistic valuation with advice on how to improve it, contact us.


These challenges amongst others are experienced by all business owners including your competitors regardless of the industry. How you respond to these challenges and whether you are in to control of them will determine your success.

Face these challenges, tackle them, resolve them and move on to focusing your time on running your business profitably.

Since 1989, CMC have been guiding business owners to achieve their goals whether sustainable growth, increasing business value, planning your exit strategy, succession or selling your business. As business owners ourselves with vast business experience,  we listen to, and support owners through the twists and turns of running a business. We give a range of practical advice, perspectives and direction to help you take control, make informed decisions and overcome challenges. If you would like help with the above challenges or other business problems, arrange your FREE 2hr appointment here.

Growth Strategies -Scaling your business for Growth : your road map of the speed bumps

What is involved in ‘scaling your business’? It is probably best to answer that question first. For a business it is the model or system whose characteristics are that it is able to cope and perform under an increased or expanding workload. Or, a scalable business is one that can maintain or improve profit margins while sales volume increases. Since profit = revenue – costs, scalability is where the growth rate of cost is less than the growth rate of turnover.

The idea of scalability in a business has become easier to model and predict in recent years as technology has made it easier to acquire customers and scale. Technology companies or technology intensive businesses can have an amazing ability to scale quickly, making them high growth opportunities. For example businesses with low operating overhead and little to no burden of shop fronts, warehousing & inventory don’t need a lot of resources or infrastructure to grow rapidly.

At its core, a scalable business is one that focuses on the implementation of processes that lead to an efficient and effective operation. It is therefore key that the business has effective tools for measurement, so the entire business can be assessed and managed at every level.

Making the decision for scaling your business is an exciting process that has the potential to bring significant success to both your business and to you the owner manager. Scaling your business isn’t always an easy thing to do, as the many areas needing to change that can hinder a successful businesses.

So let’s get some details on the road map to scaling your business, i.e. what are the pitfalls and how to get some answers to them

Scaling your business ‘too soon’

Some owner managers try and scale with errors still present in the product they are taking to market, believing that these kinks will work themselves out over time. Others start to increase growth and production without being clear who their future customers actually are or without knowing if the market has sustainable demand.

   Answer – do your due diligence and perfect your product before you begin to scale.

Choosing the wrong people as part of your team

Whether it’s engaging suppliers, recruiting staff or adding investors, or growing internal teams, this is one of the most common mistakes growth businesses make. It is easy to simply accept the help and staff that come along naturally, without thinking about how they fit into your bigger plan as the business grows. These people represent long-term relationships, so carefully consider how they will work with your company and culture.

   Answer – if possible engage with people who have scaled a business before and rely on their expertise – remember that a great culture fit and competence are key for the long term.

Focusing on sales and marketing instead of building long-term demand

When scaling, many owner managers focus on massively increasing sales and marketing activities, but these are only short-term, tactical initiatives.

   Answer – create a strong buyer market and build long-term demand is just as important to your overall success — if not more so – there is such a thing as over-hiring for sales in your business.

Competing on price

As you begin to scale your business, it is tempting to compete on price in order to gain market share. From a cost perspective you think that by ramping up production, you can cut your price and still be profitable. While this works occasionally, competing on price more often results in a “race to the bottom,” both in terms of profit and quality.

   Answer – it is far better to compete on quality and customer service than to position yourself as your industry’s low-cost provider.

Not changing management structures as growth occurs

The management and leadership structures that work well with a company of 20 people may not work well when you have 200 staff. Scaling brings its own challenges, and your leadership team has to be ready to change and adapt.

   Answer – a flat structure that worked well when you were small will almost certainly give way to a more defined leadership hierarchy with more clearly defined roles and responsibilities for individuals and teams.

Forgetting that trimming fat is part of scaling

A few owner managers think that scaling only involves growing upward and sideward. You may find things that no longer work, departments that are no longer needed, and staff members that cannot grow as the business grows.

   Answer – trim back those areas that are no longer working is an important part of building on those things that are. As you scale your business, don’t be afraid to trim fat so that your company can grow effectively.

Ignoring issues that arise when they arise

An owner manager scaling the business cannot ignore issues as they arise. Growth, especially when it happens quickly, takes most people out of their comfort zone, so there are bound to be personnel, personality, product, etc. issues along the way.

   Answer – do not try and persuade yourself that things are OK when you can see they are not, and do not believe that things can’t change for the better by leaving things as they are – confront issues head on to avoid long-term damage to your business.

Making the decision to scale your business is not always a simple set of choices so you will need some guidance.   If you as an owner manger wanting to scale your business efficiently and effectively in the next 6 to 12 months call CMC on 01844 319286 or complete the contact form below.

White Paper – Taking Control of the Cash in Your Business

Do you feel in control of the cash in your small business?

For small businesses cash is the lifeblood to keep daily operations running. Too many business owners struggle to manage it effectively or recognise the importance.

‘92% of business owners surveyed experienced problems from time to time or consistently.’ CMC Partners Survey 2016

It is normal to have cash flow inconsistencies but being in control is essential.

This whitepaper covers:

  • Basics of accounting – what is profit, determining business viability, cash to cash cycle
  • 7 steps to follow is cash becomes tight
  • Checklist of ‘red flags’ to identify the problems causing cash issues
  • Why too much surplus cash in the business is not a good idea
  • Preventative actions
  • and more

This whitepaper is designed to help business owners minimise the impact of the peaks and troughs experienced during a financial year. This freeing up your time to focus your attention on managing and/or growing your business.

Learn how to manage your business ‘by numbers’.

Download your cash whitepaper by completing the form below

Selling your business

Increasing business profitability with 4 simple steps

As a general rule, I find that people have a tendency to make things more complicated than necessary. This is especially true if the problem they are trying to solve seems to be difficult, or the objective they want to achieve is elusive. Under these circumstances I think we all quite naturally look for complicated answers. Increasing business profitability is a good example of an issue where it is easy to overlook the straightforward and simple answers.

I will go into each in a bit more detail below but my four “no-brainer” tips to increase business profit are:

  1. Never give anything away . . . ever!
  2. Look for ways to reduce costs – and do this routinely!
  3. Upsell or cross-sell at every opportunity!
  4. Send the invoice and collect the cash promptly!

1. No Freebies

Most small businesses would be horrified by the suggestion that they give stuff away – but most do. The discount that wasn’t really necessary, the training course that should really have been paid for, the accessory that should have been sent with the original order but had to be shipped separately, the second visit to the customer when the problem should have been fixed on the first occasion. Every single example quoted above – and dozens more besides – are just different ways of giving stuff away. Stop being so charitable and the profits will improve.

2. Reduce Costs

Reducing costs is absolutely the easiest way to improve profitability.  And yet, most small businesses seldom analyse their direct costs or review their overhead spend. The only way to do this properly is to adopt a “zero-base” mentality and challenge each and every item of cost on a line-by-line basis.

Surprisingly, one of biggest and most common areas where small businesses sustain and tolerate inflated costs is in their payroll or wages bill. This might sound crazy when everyone appears to be “so busy”.  Busy they may be, but are they doing productive work, in an efficient manner? In small businesses there is often a reluctance to address the issue of poor individual performance or staff discipline. The result is low levels of productivity or, in other words, higher costs than necessary.

The other big, and usually hidden culprit, in most small businesses is poor quality. Every time you get stuff wrong – and have to do it again – you drive down profit (and you damage your reputation which makes the next sale harder . . . and therefore more costly. A double whammy!).

3. Upsell and cross sell

A lot of the cost in any typical business is down to all the marketing and selling activity. The simple version of the story is that finding a new customer costs a lot of money and usually so does the effort involved to close each deal.  If you can persuade the customer to buy more of the things they need with each transaction your sales operation becomes more profitable. The classic example that is always given is the tin of shoe polish you are offered each time you buy a new pair of shoes.

4. Send the invoice and collect the cash

The last point requires no explanation – just sound business practice. Even so, it is surprising how often credit control is most commonly the function that nobody considers to be their job.

Do you need help increasing business profitability?

These ideas for increasing business profitability have two important things in common. Firstly, it is usually far easier to identify the problem from outside and secondly fixing the problem will usually require a change of behaviour. Two very good reasons to work with a mentor you can trust.

FREE Seminar: So you are thinking about selling your business?


Date: Thursday 8th March 2018 

Time: 4.30pm-7.30pm

Location: The Dudley Canal and Tunnel Trust, 501 Birmingham Road, Dudley, West Midlands, DY1 4SB



Attend this evening seminar and leave with an understanding of the actions required to prepare your business for sale, how to maximise the attractiveness and sale price of your business, mitigate risks and avoid common mistakes.

Selling your business is likely to be the largest and most important financial deal you will ever make so it is important you get it right, attracting a price that will support your planned retirement lifestyle.

You will also have the opportunity to participate in a complimentary wine tasting to finish the evening.


Event Organisers

Who should attend

Business owners and spouses should attend if –

  • You are seriously considering selling, or transferring control of your business, in the near future – or any time over the next few years
  • You have not yet given serious thought to what happens to your business once you no longer want to run it every day – or if you should no longer be able to run it every day
  • You would like to understand how a typical business sale process works, who might buy your business and how they might arrive at an offer price
  • You already understand the basics but you wish to understand how to maximise value and minimise avoidable risks
  • You do not really know how to go about developing an “exit strategy” that will deliver on your personal objectives

Businesses with multiple owners are all welcome to attend. In addition, spouses or partners are also welcome as we appreciate that selling your business can be a personal matter as well.

If you do not like high pressure sales tactics that many bigger brokerage companies employ then you will enjoy this seminar.

In this event you will learn

  • How best to prepare for your exit – creating an exit strategy
  • How to value your business
  • Steps to maximise your business value in the sale run up
  • Making your business more attractive to buyers
  • The 6 step selling process
  • Why businesses fail to sale – avoiding those pitfalls
  • Legal guidance
  • Tax issues relating to the sale

About the speakers

Bob Brown – CMC Partners

CMC partner, Bob Brown has been providing practical help and guidance to business owners for over 20 years. He has helped a range of businesses from engineering and manufacturing to hi-tech and professional services.

Read more about Bob


Nicholas Lee – Succession Group

Financial planner, Nicholas Lee has over 20 years experience in helping people to recognise their personal financial priorities and enabling them to implement and maintain sensible financial plans. His goal is to help as many people as possible to live the life they deserve.

Read more about Nicholas 


Kevin Jones – Silks Solicitors

Kevin Jones, Director at Silks Solicitors has over 30 years hands on experience of looking after business and their owners. He has the technical expertise, long experience and ‘can do’ approach making Kevin   the first port of call for owners who need help with legal aspects.

Read more about Kevin 


David Wright – Nicklin Chartered Accountants & Business Advisers

Chartered Accountant and Business Adviser, David Wright has been qualified since 1994. He works extensively with owners of small and medium-sized companies. David enjoys helping clients to set up reporting systems that enable clients to control their companies, measure the development of them and protect the financial wealth that is created.

Read more about David 


Richard Lloyd – CMC Partners

CMC partners, Richard Lloyd provides growth and exit strategy development for business owners in Derbyshire and East Straffordshire. With over 30 years business experience, Richard has gained a wealth of knowledge enabling him to create value for his clients.

Read more about Richard

Managing Volatility in Business

With 2018 set to be another challenging year, managing volatility will be a skill all business leaders will need to nurture. Here is our checklist for helping you to review your business to ensure it’s as strong as possible. In this post, we focus on the elements that you can control especially from a cash flow perspective:

Review current activity

Put the customer at the centre of your efforts, make sure your customer relationships are solid. Remember it is easier to maintain what you have rather than win additional new business.

Review and map out the main processes in your business (e.g. sales processing, order fulfilment, marketing etc.) get your team members to suggest and challenge their efficiencies.

Review your budgets and set realistic and achievable targets. Use ‘bottom up’ budgeting where everyone in the office gives input on areas over which they have control – target a 10% cost saving.

Review your realistic staffing needs over the next 12 months…

Get your members of staff involved in a discussion of likely trading conditions and get their input on reducing costs and maintaining revenues.

Review your list of products and services and eliminate those that are unprofitable or not core products/services. Any services identified as ‘non-core’ can be outsourced.

If appropriate, review banking facilities and discuss future needs. If you are going to require additional funding ask for it at least 3 months before you need it.

Measure, Measure and Measure again.

Bring your planning time horizon in to the short term, establish your key performance indicators (KPI’s) and measure them on a weekly basis e.g.

Sales leads generated

Sales fulfilled

Cash balance

Stock turnover

Debtor days

Gross profit

Net profit

The weekly review should include setting objectives and reacting early to trends, managing volatility is a hands-on activity and is the primary responsibility of the business leader. For more advice on which numbers to focus on read our blog on Keeping Control. 

Manage Cash

In challenging times, whatever size of your firm, there is one immutable truth – cash is king.

Identify and get rid of won’t pay customers, review debtors list and chase up overdue invoices. Make sure your terms of business contain explicit payment terms. Offer existing debtors inducements to pay early. Offer all debtors flexible ways to pay and assign responsibility to one individual for invoicing and collections.

One last thought…

In conclusion, in volatile times things never go as planned. Some business leaders are inclined to want to reflect and plan for contingencies. Others will wait and then react as problems arise before dealing with it. We have seen both work – when managed properly. The important thing is for the business leader to pick one style and follow it through!



7 Deadly Sins that Stop Businesses Growing

I have worked with many businesses of different sizes and at different stages of their ‘life’, e.g.  early stage start-ups to mature businesses handing over to the next generation or exiting via a trade sale and ‘growing their business sustainably’ is always on the agenda.

All companies need to increase sales and improve their performance on a continuing basis if they are to survive.   However companies lose between 10-20% of their customers per year due to bankruptcies, mergers and simply because the customer stops buying.

Studies show that the vast majority (more than 66%) of companies consider that sales and marketing are the key issues for their business right now.  But they are less likely to do something about it than cutting costs.  Here are the 7 deadly sins – mistakes that many companies make in trying to improve their performance.

  1. Get out and do more sales calls
    This is the normal reaction of most sales managers. When the sales teams are not performing well they will require redoubling of efforts in either sales visits or telephone calls. But doing more of the same thing will necessarily get more of the same result: below target performance. A review of their target customers, messages and better understanding of benefits is more likely to achieve results required. They need to work smarter not harder.
  2. Discounting
    Discounting is an invidious way to get more sales – but most times it will not work. Yet many sales people will resort to this as a way of closing and trying to increase sales. It is easy for the lazy sales person and it is frequently a panic measure brought about by the first deadly sin. If you have not correctly positioned your product no amount of discounting your product or service will persuade your customer that it is even better value for money.
  3. Don’t bother to train you sales staff – ever!
    The average number of days spent training sales people in the UK is 1 day per year! In the US it is more like 2 days per month – and the results show. To become top performers sales teams need to be trained on technique, process and the benefits of the products again and again. Many companies consider the training budget to be a cost but they should look at it as an investment.
  4. Do not target customers
    Allowing your sales people to do what they like, or go where they like to get orders will result in an increasing number of low value customers that will not contribute significantly to your bottom line. Your costs will increase as sales people will travel anywhere to get orders, no matter what the value of those orders whilst your competitors will meanwhile grab the biggest and best customers at your expense.
  5. Do not set your targets for your sales team.
    By not setting targets your sales team will not know what is expected of them, nor will they know which customers to target and the sales manager will find it difficult to motivate them to a better performance. Sales people who are not comfortable with targets are just that – comfortable. They stay within their comfort zone and do not rock the boat. Generously, you could say they are order takes not professional sales people.
  6. Do not bother with all that ‘fluffy bunny’ motivation stuff!
    Selling is a tough occupation and motivation needs to be a regular part of the sales/business manager’s activities. Identifying what the right sort of motivation is for each of the sales/accounts team and then working on that will help turn average sales people into stars. But start with your own attitude. Attitudes are contagious. Therefore ask yourself, is yours worth catching?
  7. Never ever, ask for the order
    More than 70% of sales people do NOT ask for the order! They may well qualify the prospect right, identify the benefits for that particular customer, do a fine presentation, answer all the objections, but then do not complete the sale. Often fear of rejection is at the root of this issue. But by not asking for some form of commitment they are leaving the door open for the client to say “I’ll think about it.”

Just having read through the above 7 deadly sins should have given you some pretty good food for thought about your own company.  Ask yourself, how many of these sins do you think your customer facing team commit on a daily/weekly basis and is there anything that you can do to improve their overall sales performance?

If you need support in growing your business sustainably, book your FREE confidential meeting by completing the ‘Contact form below.

Growth Video Testimonial: IT Solutions Provider, Peak Support Services

How CMC helped this owner to increase profitability within 18 months:

Listen to the Managing Director of this successful IT Solutions provider on how his local CMC Partner, Richard Lloyd helped him to increase the profitability of the business and be in control of the business destiny.

Business: IT Solutions Provider

Number of employees: 15 people

‘In 18 months of working with our local CMC Partner Richard Lloyd, we achieved £60,000 profitability that we wouldn’t have done without his help…..I believe we are now in control of the business destiny and will continue to grow with the assistance of Richard’. Rob Broatch, Managing Director of Peak Support Services.

‘Richard is results orientated, he’s got fantastic vision and as a benefit he is a delight to work with so I highly recommend any company wishing to grow to work with him’. Rob Broatch, Managing Director of Peak Support Services.

Do you need help with your business growth? Contact us today to arrange a FREE confidential meeting