Time to start planning your growth strategy for 2025

Many businesses are continuing to plan for organic growth. The slow burn…

And that’s not surprising. Business investment was weaker in 2024, declining by 0.2% over the year reflecting a lagged impact of stagnant GDP growth over the last 12 months and the drag from high interest rates.

The wait and see approach, relying on organic channels and not capital investment, to grow an SME business make sense within the current climate for many businesses.

Yet there is a recovery forecasted. As activity strengthens, the business investment forecast there on the horizon is of 1.8% growth in 2025.

Earlier this year, EY commented that the UK economy’s growth was to accelerate in 2025 as activity grew and barriers fell. Those GDP growth expectations for 2025 have been upgraded from 1.8% to 2%.

Peter Arnold, EY UK Chief Economist, commented that:

“While 2024 isn’t expected to be a year of enormous economic momentum, it should provide a stepping stone to a far brighter 2025. The UK’s performance so far this year suggests that stagnation is lifting, with activity surveys signalling a return to growth across various sectors and improved consumer confidence.”

So challenges persist for business investment, but the longer-term outlook is improving.

The CBI's latest UK Economic Forecast shows that UK GDP growth is projected to rise to 1.0% for 2024 with momentum continuing into 2025. Consumer spending is expected to be the main driver of growth, reflecting an improvement in households' real incomes as inflation falls.

The new Labour Government has placed economic growth at the heart of their plans for the next five years. So, with The Bank of England starting rate cuts in the summer and as monetary policy loosens, the economic outlook should improve further.

So, how to capitalise on the 2025 buzz? Embrace change.

After the last few years, we have all become experts in adapting to change. But with the new year comes new challenges. With more businesses leveraging new technology like generative AI and the unpredictable nature of the current economic landscape, your plan needs to have room to adapt to roadblocks or challenges that come your way.

Start 2025 planning on a fresh sheet. Revisit the vision, your mission. Set goals, and positioning in light of lessons learned from recent years. Reimagine your business strategy to turn headwinds into tailwinds, while winning on emerging customer priorities.

Understand how current and potential customers' priorities are changing.

Current and potential customers are generally the most important places to listen for meaningful signals of change. SME business owners should engage customers in a dialogue regarding their most significant concerns as they look to the future and how external changes could rejig customer priorities.

These changing customer priorities could set up a scramble for how your company should respond. Do you need to develop new products to meet those new customer needs? Can you get products to market quickly that will satisfy customer needs more effectively than your competitors? Do you have the team trained and scaled in place?

How about Tech?

Like adopting sustainability practices or building strong partnerships and networks, strategic advice on the importance of adopting digital transformation almost feels dated, yet the number of businesses that are still to fully accept and embrace the pace of emerging technologies remains alarming.

SMEs should continue to invest in technologies such as artificial intelligence (AI), machine learning (ML) and automation to improve customer experiences, to become more efficient and gain a competitive edge.

Strengthening cybersecurity with an increase in digitalisation of business operations, should be central to this and critical to protect data and day-to-day operations and customer access.

Utilising data and leveraging this for data driven decision making should be core to any commercial and market plans, informed decisions on strategy and used to identify growth opportunities.

Talent Management and Upskilling

Empower your people. Focus on accessing capital to manage your talent and upskill your teams, while increasing your hiring capability.

Investing in talent acquisition strategies that prioritise diversity and skills alignment, while offering remote and hybrid working options are increasingly important to attract top talent.

And with fast-paced technological change, SMEs should continuously invest in upskilling and reskilling their workforce to stay competitive and innovative.

Take some chances as well. Be curious. Learn about innovations and new challenges in your industry. See how your team can grow with them.

Accessing the right capital to execute your 2025 growth plan

We know there are alternative financing options out there such as crowdfunding and venture capital. We review what might be right for you in our blog what's best for your business, equity or debt capital.

But for tailored growth capital, we provide bespoke, long term acquisition finance solutions to UK businesses not one-size-fits all blanket loans.

We exist because we truly believe we provide a better alternative with our custom-made funding solutions for UK businesses to help you grow and succeed.

It’s in our DNA.

We are experts in SME lending, so whatever the loan purpose, our goal is to become your long term funding partner, which is why each bespoke loan will be specially-designed for you.

We can provide the best solution for you, without you giving away control or equity, and help you get on top of your cashflow.

We understand the importance of trusted relationships and have dedicated regional directors based across the UK who will take the time to understand your business, your unique needs specific to you and support you with your business loan application. We enhance our traditional underwriting with data analytics, including timely risk and trend analysis to put you in control of your future.

By breaking down silos typically found in traditional lending organisations, we give you direct access to decision makers, enabling funding in 6–8 weeks.

Get in touch now to discuss funding options

Tailored solutions for SMEs

We understand that SMEs have unique financial circumstances and requirements. Our acquisition finance solutions are specifically tailored to meet the needs of small and medium-sized enterprises:

Fast and Efficient Process: As an alternative lender, we have a streamlined approval process designed to provide you with a quick response. We recognise the importance of agility in seizing acquisition opportunities, ensuring minimal delays.

Flexible Financing Structures: We work closely with you to create financing structures that align with your business goals and financial capabilities. Our solutions can include a combination of debt and equity financing tailored to your specific acquisition.

Considerate Risk Assessment: Unlike traditional lenders, we take a comprehensive view of your business potential beyond just historical financials. Our risk assessment considers your growth prospects, industry position, and the strategic merits of the acquisition, enabling us to provide financing options that suit your business.

Our collaborative approach

At SME Capital, we believe in fostering strong partnerships with our clients. When it comes to acquisition finance, our collaborative approach sets us apart:

Personalised Support: We assign a dedicated team to work closely with you throughout the acquisition finance process. Our experienced professionals provide personalised support, ensuring a deep understanding of your business goals and tailoring our solutions accordingly.

Due Diligence Assistance: We assist you in conducting thorough due diligence on the target company. Our expertise helps you assess financial performance, market position, growth potential, and potential risks, providing valuable insights to inform your acquisition decision.

Access to Network: Our extensive network includes experts in mergers and acquisitions, legal advisors, and industry specialists. We leverage these connections to provide you with holistic guidance and facilitate a smooth acquisition process.

SME Capital uses a cash flow-based approach to lending, offering a multiple of business profitability, specifically EBITDA, as opposed to a loan amount being directly tied to the value of specific assets. We can provide an economic solution to consolidate smaller lenders, or refinance expensive short-term loans, while providing additional working capital for the business.

With repayment terms ranging from 3 to 7 years and flexibility on repayment structures SME Capital is an effective, relationship-led refinance solution for qualifying businesses in any sector that have been trading more than 3 years with £250,000+ EBITDA.

About SME Capital

SME Capital was founded to support the growing number of SMEs who face difficulty or frustration in accessing capital through traditional methods. We understand the importance of real and trusted relationships in the SME lending market and have dedicated Regional Directors based across the UK.

By combining traditional lending expertise with the latest in data analytics, we are supporting established UK SMEs with their long-term objectives and business ambitions.

There are expectations for UK economy growth in 2025 - so is this now the time to start planning your growth strategy?