Champion Round-Up | By Ged Cosgrove, group managing partner
June has arrived, and so too has the sunshine. With optimism in the air, a survey of 2,000 owner-managed businesses in 82 countries revealed how they’ve experienced their greatest growth in recent years, with 43% seeing a double-digit sales boom in the last financial year.
In turbulent times, the report offers wisdom we can all learn from. But why have SMEs, in particular, been able to not just hold strong, but also grow?
Analysis puts this down to a handful of factors. Firstly, long-term thinking in owner-managed and run businesses is crucial. Where decision makers are united in a view that this business must stand the test of time and maintain value when future generations take the helm, they are likely to weather hard times better. Perhaps this means not being beholden to the expectation of dividends, choosing to shore up the business and employees instead.
This united approach and ambition also allows SMEs to pivot and adapt at speed, unburdened by conflicting goals and varying agendas.
SMEs also tend to take on less debt, choosing instead to reinvest profit into the business. This approach eases pressure during turbulent times, allowing for a focus on strategy. While it may initially slow growth, steady foundations create businesses built to last.
More interestingly still are the fortunes of businesses with clear priorities. The survey found that the highest-performing firms prioritised three clear areas: employee incentives (53%), boards committed to diversity (52%) and strong digital capabilities (47%). Sometimes seen as ‘nice to haves’, these priorities have proven to be instrumental in the success of SMEs across the globe.
Meanwhile, as reliance on digital grows in new ways, I would urge you to consider your security processes and your investment into cyber insurance.
Insight from our insurance arm – Champion Professional Risks – reveals the significance of Multi-Factor Authentication (MFA), a security mechanism that combines two or more independent factors to authenticate a user’s identity. These factors typically fall into three categories: something you know (such as a password or PIN), something you have (such as a mobile device or smart card), and something you are (such as biometric data like fingerprints or facial recognition).
So severe is the threat of a cyber-attack, that most insurers now insist that MFA is implemented by prospective policyholders. You may find that without MFA in place, you are unable to secure cyber insurance cover. To explain the issue fully, John Jones, managing director of Champion Professional Risks, has penned an overview: https://www.linkedin.com/pulse/understanding-multi-factor-authentication-its-growing-importance/
My advice would be to interrogate your working practices with this knowledge in mind, as the number of cyber-attacks in the UK grew by 77 per cent in 2022, thanks to increasingly agile hackers and a growing reliance on software that facilitates home working.