Scaling a small business is an exciting yet daunting prospect. For many UK entrepreneurs, growth offers the chance to boost revenue, expand market reach, and strengthen their competitive position.
However, with growth come financial challenges that can derail even the most promising ventures—especially for slightly larger small to medium-sized enterprises (SMEs) transitioning to more complex operations, often supported by a financial controller.
Cash flow tightens under new demands, costs spiral, funding feels elusive, and regulations multiply. The good news? With strategic planning and expert support, these hurdles can fuel your success instead of derailing it.
Whether you’re a retailer expanding locations or a manufacturer scaling production, preparation is everything. Let’s explore the key challenges and how to conquer them.
Keeping Cash Flow Steady During Growth
One of the first hurdles SMEs face as they grow is keeping cash flowing smoothly. Cash flow is the heartbeat of any business, and it beats faster when scaling. As SMEs expand, they often face upfront costs, new hires, equipment, or premises—before revenue catches up.
Late payments exacerbate this strain, a 2025 survey of over 2,000 small business respondents revealed that six in ten UK small businesses feel late payments are preventing them from reaching their full potential. The same study paints a troubling picture: 45% reported experiencing more late payments than they did 12 months ago, and half are concerned that the number will climb over the next year.
For slightly larger SMEs, managing bigger teams and overheads, these delays can escalate from a manageable trickle into a drought. The solution lies in proactive management. A financial controller can introduce rolling cash flow forecasts, giving a clear view of income and outgoings over the next 12 months.
For example, financial controllers might pinpoint seasonal dips—like a post-holiday slowdown—and plan reserves accordingly, avoiding last-minute scrambles. Picture a London café chain adding a third location: a controller might recommend stashing three months’ rent as a buffer.
For businesses with significant invoices, invoice financing offers a quick fix by unlocking cash tied up in unpaid bills. Tools like Xero provide real-time tracking, while negotiating shorter payment terms or offering early payment incentives can keep funds flowing.
Securing Funding to Fuel Expansion
Expansion requires investment, but accessing funds can feel like pushing a boulder uphill. The British Business Bank’s 2024 report shows that nearly half of first-time SME loan applicants are rejected, a barrier that hits harder for larger SMEs needing significant capital for new markets or infrastructure. With interest rates stabilised at higher levels into 2025, borrowing is costlier, adding pressure to already tight budgets.
Diversification is the answer. Beyond bank loans, asset finance or peer-to-peer lending are viable alternatives. A financial controller can strengthen funding applications with detailed business plans or tap into schemes like the Enterprise Finance Guarantee.
They might, for instance, highlight a company’s strong order book to reassure lenders of repayment capacity. Their strategic oversight ensures funds align with growth ambitions, not just immediate needs. This could mean choosing a loan that supports a phased expansion—like opening one new location at a time—rather than overcommitting to a lump sum that strains cash flow later.
Even with funds secured, keeping costs in check becomes the next battle.
Managing Costs as Your Business Scales
Scaling drives up costs—fast. More staff, larger premises, and utility bills like the £1,738 Energy Price Cap (set from January 2025) pile on pressure. Salaries top the list as SMEs grow, especially for larger ones juggling 20+ employees. Revenue must keep pace, or the balance tips. Financial controllers tackle this with a sharp eye, hunting savings without slashing quality.
They oversee cost analysis, identifying opportunities like supplier renegotiations or energy-efficient upgrades such as LED lighting. Discounts might come from bulk deals with long-term suppliers, or they could recommend switching to providers with better rates, trimming monthly bills.
Their expertise shines in evaluating major decisions, like whether to lease or buy a warehouse ensuring every pound spent fuels growth, not just overheads. For SMEs, this resilience is gold.
Compliance and Staying on the Right Side of the Rules
As your SME grows, so do the rules. Employers’ National Insurance increases to 15% from April 2025, hitting larger SMEs with bigger payrolls hardest. Expanding abroad? Post-Brexit trade laws and multicurrency reporting adds further layers of complexity.
Fines for slip-ups, like missing a VAT deadline can derail momentum. Staying compliant isn’t optional; it’s survival. Financial controllers turn this burden into a strength. They oversee software use like Xero to track tax changes in real time, ensuring deadlines are flagged and met. Imagine an SME fined £2,000 for late VAT in 2024—a controller’s alerts could’ve saved it.
A controller’s foresight keeps your focus on growth, not penalties. Whether it’s HMRC or international standards, they ensure you’re covered, letting you scale with confidence.
Building a Team for the Future
Scaling demands a skilled workforce, but talent is hard to come by. A 2024 Startups.co.uk study revealed that 80% of SMEs planned workforce growth, yet competition and rising wage expectations make recruitment tricky. For slightly larger SMEs, reliant on specialised roles like data analysts, this challenge is magnified in a tight labour market.
Flexibility can tip the scales, offering hybrid working or competitive benefits to attract talent. Financial controllers align budgets to support upskilling programmes, preparing current staff for demands like AI integration, or advise outsourcing niche roles as their role shifts from being largely focused on value protection and value optimization to embracing value creation.
They balance payroll growth with profitability, ensuring your team powers expansion, not just sustains it. A lean, skilled workforce is your edge.
Your Partner in Scaling Success
With 5.5 million SMEs powering the UK economy in March 2025, scaling is high-stakes. Financial controllers turn risks into wins, from cash flow to compliance. Ready to grow without the guesswork? Sanay’s tailored solutions help SMEs like yours scale confidently.
Contact us today and let’s chart your path to sustainable success together.
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