Biggest Problems For SMEs & Their Solutions (IT in 2020)

Businesses and small-medium sized enterprises (SMEs) seek stability and continuity – but recent findings from the SME Growth Tracker suggests they don’t currently have that. In this post, we explore the problems small London businesses face, and what role IT plays in overcoming them.

1. Poor Use of Technology

Small businesses often suffer from poor, dated or disconnected IT systems.

Inefficiencies in IT tend to arise in expanding businesses, where new tasks are incorporated and (existing, disparate) processes lack proper integration. As a result of growth, SMEs often experience internal departments using systems that are unnecessarily disconnected from other areas of the business.

Indeed the lack of integration makes using, scaling and updating existing technology a lengthy and costly task. Therefore organisations struggle to realise a return on investment from their technology.


Without the centralisation of IT solutions, businesses of all sizes suffer from inefficiencies. To be truly effective, systems require consolidation across the various lines of business.

A good IT managed service provider will understand your business so they can integrate new and old systems, streamline tasks, and improve your existing infrastructure within the shortest possible time frame. Find out more about the benefits of outsourcing your technology strategy to a professional IT service provider.

2. Expanding Globally

Expansion poses a challenge for any business. Particularly when it involves extending services to new sites in the UK -- or internationally. It’s worth noting that only 17% of UK mid-sized businesses generate revenues outside of the EU compared to 25% in Germany and 30% in Italy. So why do businesses in the UK lag behind?

A Sage survey of more than 500 business owners (and decision-makers) suggests that one of the barriers to trading abroad is a lack of understanding around international trading regulations. Navigating foreign legislation, dealing with currency fluctuations and international trading regulations is off-putting.


Seeking accurate legal or tax advice before making the first steps abroad is vitally important. Businesses such as Trade Horizons can offer your business the expertise and support you need to establish and grow your business in the UK or beyond.

Our aim here at UK IT Service is to enable business decision-makers to maintain focus on all legal/legislation implications without the need to consider the impact an overseas expansion has on their IT setup. Adjusting your technology and suggesting improvements to best accommodate changes within your company is our area of expertise.

Growing a business in London. IT Support for London based businesses

What are the barriers to scaling your own business?


3. Managing the Supply Chain

With business growth comes added layers of complexity. It’s a challenge to keep track of every detail within the supply chain -- be that logistics, stock control or finance.

Poor supply chain management is one of the most common pitfalls for SMEs. It’s alarming how much potential efficiency is lost when companies fail to maximise each and every area of the business. Wastage can hold a business back in its quest for sustainable growth.


Remember the simple principle: the longer the supply chain, the more scope there is for things to go wrong. A supply chain is only as strong as its weakest link.

Staff -- and management thereof -- are of course crucial. But SMEs increasingly lean on technology in order to responsibly assist the supply chain. Most areas of business in today’s digital age, technology is used for support — from product development at the forefront, to project planning at management level, to accounting at the back-end.

Specialist IT solutions minimise risk, and ultimately allows your business to streamline its increasingly complex process and reap rewards in the long run. Just be careful to ensure that your IT doesn’t become the weak link. To learn more about what makes a good IT Service, we recommend reading our post: What's The Best IT Support Service For Your Small Business?

4. To Cloud, or Not To Cloud?

Three common issues with Office 365 Business and their solutions

There are compelling reasons to move your business to the cloud.


Providing access to information anywhere, anytime across multiple devices is fundamental for the modern day business looking to capitalise on the ‘always on’ workforce.

It’s estimated that companies could add up to £1.4 billion to the UK economy each year by taking a more strategic approach to flexible working. To invest in Cloud technology and to part ways with existing infrastructure is however a tough decision for SMEs.

Is Cloud computing really the future of your business?


Realising the benefits of mobile and flexible working requires careful use of Cloud and mobile technologies. An IT specialist can assist with this.
UK IT Service can bridge the gap between technology and your business. We believe in stripping back the tech jargon and providing pragmatic solutions. Our staff won’t suggest new technology just because it’s ‘trendy’.

We’ll analyse your requirements, and explain the breadth of options available to you — whether its on-premises, hybrid, or a fully Cloud solution. Crucially, we can provide you with clarity on the impact on your business of transitioning to Cloud computing, both short and long term.

While Cloud may well be the future for many UK SMEs, whether you choose to employ it ultimately depends on a number of factors including your IT budget and business plans. Browse through our various cloud & hosted solutions and see the benefits of Cloud computing solution to your small business.

5. Information Security and Compliance

In recent years there’s been a surge in mobile data usage. As a result, cyber threats are more sophisticated, data breaches are more common, and information security compliance is higher on the government’s agenda. Security is becoming increasingly difficult to manage.

Investing in security is expensive and often seen as a ‘grudge purchase’ by SMEs wishing to remain focused on business objectives rather than looking over their shoulder. But unfortunately, companies of all sizes face the same threats, and are subject to the same rules, regardless of their budgets.

Due to a lack of knowledge and motivation, it’s unsurprising that small companies often fail to protect themselves, their staff, and clients.


Independent security experts are able to guide businesses towards protecting the interests of their staff and clients. Just be aware that some solutions are expensive and over-excessive. Look to strike a balance — where regulations are met, all interests of the business (including your employees and clients) are sufficiently protected, and the cost isn’t detrimental to growth.

At UK IT Service we understand that SMEs require fast, cost-effective control measures; IT solutions that are easy to manage. We take security very seriously and look to educate all clients on both the regulations and potential threats. Our proactive approach means that the vast majority of security vulnerabilities are addressed before they pose a serious problem. In the event of an unforeseeable crisis, we’re poised to help you recover as quickly as possible.

Take a look at some of UK IT Service’s free cyber-security resources.

6. Skills and Talent Shortages

Growing a business in London
A survey of 2,500 SMEs found that poor management skills -- especially entrepreneurial skills -- are in need of improvement. Skill & talent shortages extend beyond management and into the workforce.

Competition is a main contributor to this problem as, since inception, SMEs face pressures from bigger, competing companies within the same field. Larger companies benefit from the ability to lure valuable, skilled staff under the promise of career stability and personal growth. Joining an independent firm is a riskier proposition.

If competition wasn’t enough, UK SMEs have also suffered staff shortages since 2016’s Brexit vote. There’s been a sharp increase in the number of EU citizens -- who provide much of the extra labour required by UK SMEs -- leaving the UK due to uncertainty over future rights and status. The same issues are likely to carry through to 2019.

Essentially, skilled labour is shrinking in the nation’s capital. It’s becoming increasingly difficult for small companies to find talented individuals. Yet it remains vital to have the right people in place to meet the ever-rising expectations of customers.


SMEs must invest in employee engagement, training, education, and labour-saving machinery with a view to preventing talent shortages being their toughest challenge in 2019.

Machinery, such as modern IT systems, are arguably the broadest component for supporting modern startups and small businesses. But no matter what technology you use to streamline your tasks, staff remains your true asset.

We recognise the importance of our people. In fact, we heavily invest in training and developing our own personnel. In turn, our clients benefit from a competitively-priced first class service — whether that involves an engineer coming to your office to resolve a fault, or one of our helpdesk staff answering your calls. Improving our workforce comes at our expense — not our clients, which is why they give UK IT Service these glowing reviews of our IT services.

7. Rising Costs and Reduced Revenues

This is perhaps the most obvious problem of all. According to the RSA Economic Imperative Report, 1 million (39%) of SMEs perceive rising business costs as a major risk to their business. SME costs are expected to continue rising in line with inflation in 2019.

The post-Brexit fall in the pound hasn’t helped matters, either. In particular, it directly impacted businesses that buy materials, products or services from overseas. Coupled with the increase in other business costs, international SMEs feel the pinch.

A study by Make it Cheaper found that the most common reaction to increased costs was (a) to increase prices of products/services, and (b) make staff cuts. The majority of SMEs predict that their revenues will shrink or remain the same through 2019. Optimism is low, productivity is down, and profits are a genuine concern.


There are some actions that businesses can take to reduce costs on their cash flow. As Jonathan Elliot, the MD of Make it Cheaper states: “by shopping around, comparing prices, regularly switching suppliers and taking care not to get caught in contract renewal traps, companies can go a long way to bringing their overheads under control.”

So how does UK IT Service help clients save money through this turbulent period?

  1. No standard 12 month contract. Choose to stay or leave, as you see fit for your business strategy and IT budget
  2. Adjustable IT overheads. We’re flexible to your changing needs.
  3. We do the ‘shopping around’ for your technology. One of our jobs is to identify the most suitable and cost-effective software & hardware for your business. We’ll present the best possible prices to you.

8. Securing & Managing Funds

How to grow your London business
Raising and managing funds for your growing enterprise is another challenge.

Once you’ve secured funding for your business concept, considerable attention must be turned to:

  • Reducing supply chain (production) costs, and
  • Managing cash flow.

Underperforming companies may need to address one, or both, of the above points to improve profitability. Fast-growing companies, on the other hand, often outgrow their available funds and miss out on an opportunity to expand.

Another common issue SMEs experience is not getting paid on time by customers. Or worse -- recovering from debt. The former might be out of your hands (e.g. it requires legal action). The latter is more obviously preventable through various financial channels. Many UK SMEs aren’t aware of their options.


Small businesses are looking to grow in 2019, and access to external finance may be an important enabler. It’s no longer a case of choosing between traditional term loan debt finance or relinquishing equity. Alternative lenders now offer a range of flexible, growth-focused finance products.

You can learn more about the basic funding methods for small businesses from Investopedia:

When it comes to running the business, understanding the money you have available and maximising the output is vital. Managing and monitoring payments, cashflow and profits help to prevent running the business into financial turmoil or damaging your credit score. After all, your credit score is not only important for borrowing funds -- it also affects your ability to secure good terms on trade credit.

So what about IT? How does that factor in?

Consider how system downtime or instability impacts your costs. If the running of your service hinges on technology -- to the point that you couldn’t possibly sustain it in the event of a hardware or software failure -- then outsourcing could be the way forward. For more information on Business IT support, read our post on the Benefits of Business IT Support For Small Companies In London. Alternatively, you can go straight in to the  IT Support for SME’s page, which includes SME's guide price and the services we offer small to medium businesses in London.

UK IT Service is responsible for ensuring that our clients’ systems are always operational and working day and night. We proactively monitor their technology to detect hardware or software faults before they hamper productivity. In the event of an unforeseeable fault, making a rapid recovery is our top priority. We know how important continuity is to your growing business.

Does IT Play a Role in the Development of Your SME? Will Improved IT Solutions Assist Your SME in Overcoming Problems in 2019?

UK IT Services believes that IT plays a pivotal role in the growth and development of British SMEs.

We aim to empower our clients by reducing the amount of time, expense and other resources they devote to technology. Through our IT Services, SMEs become leaner, more flexible, and able to scale up their services at a lower cost. Read how UK IT Service helped one London business to grow in 2017.

If used effectively, IT increases company productivity and enables SMEs to prepare for unforeseeable economic uncertainties. To learn more about how our London IT support company can help stabilise your business operations, and align with your vision of growth and sustainability, please reach out to us here.


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