The Biggest Challenges SMEs Face – & How to Overcome Them

Business Law

Saturday 30th November marked Small Business Saturday, which celebrates small business across the United Kingdom. SMEs face several challenges in an uncertain market, from maintaining profitability, attracting new customers and retaining valuable employees.

Gareth Thompson

Gareth Thompson, Commercial Solicitor at CJCH, discusses the common challenges faced by SMEs and how advice from a specialist solicitor provides value to a small business.

What are the most common legal issues SMEs face?

Most common legal issues arise from failing to adequately have in place contracts between employees & suppliers. Additionally, poor management with cashflow or credit control causes issues for SMEs.

What are the different business structures?

Whether it’s a sole trader, partnership, private limited company or limited liability company. Solicitors advise on the different features of business structures. Each has its own advantages and disadvantages. Whilst you can change the structure down the line, it is better to get it right from the outset. Importantly, seek legal advice to choose the correct structure for your business.

How can a solicitor help owners protect their business from copycats?

It is vital that SMEs protect their Intellectual Property! Especially for new businesses – incorporate to get the trade name registered, registering trademarks or patents. Moreover, ensure the service and employment contracts have valid non-compete clauses.

How can small businesses prepare for Brexit?

The dreaded B-word! The UK government published tailored advice to prepare your business – reading that is the best place to start. The link is found here: https://www.gov.uk/business-uk-leaving-eu

Furthermore, if your SME is supplied or exports to the EU, it is imperative to ensure contracts are in place ahead of Brexit. Engage with your partners to asses their own readiness – it’s not just your own business, after all.

What top tips would you give to someone running a small business?

A common issue for SMEs, particularly new enterprises, is maintaining cash flow to sustain growth. It is important to know your outgoings, bundle products & services and encourage repeat business.

Above all, the three golden rules are – have appropriate contracts in place! Protect your IP! Ask for help/legal advice! The last point is especially important, seeking legal advice can save your SME costs down the line.

How can we help

CJCH’s commercial services span the full spectrum of corporate and commercial requirements. From start-ups, medium-sized and large organisations, we provide legal support and advice to leverage opportunities and minimize risk to your business.

Get in touch with a member of our commercial team today.

Telephone: 0333 231 6405

Email: commercial@cjch.co.uk

Supporting SMEs with Legal Issues

Running a business is in equal parts exciting and daunting. It involves complex legal issues which are overwhelming without the proper legal advice. CJCH’s commercial solicitor, Gareth Thompson, discusses the most common issues faced by SMEs and the value a commercial solicitor brings to a business.

How do you support businesses that are just getting started?

It is important to ensure incipient businesses have all the relevant documents in place to begin trading. This will vary from business to business but will usually include employment contracts, insurance, due diligence and risk assessment. Finally, it is crucial that the business takes steps to protect its intellectual property, which may not be at the forefront of the owner’s mind.

How can a business solicitor help an SME choose the right business structure?

This will depend on the needs of the business owner. Each business structure has its own strength, seeking legal advice will help you choose the right one. The most commonly chosen business structures are as follows:

  • Sole Trader
  • Partnership
  • Limited Liability Partnership (LLP)
  • Limited Liability Company (Ltd)

What are the most common legal issues SMEs face and how can solicitors help business owners avoid them?

The initial issues faced by SMEs usually revolve around setting up employment contracts and drafting articles of association. Whilst it might be attractive to business owners to use standard templates for these documents, there is a real risk that they do not suitably protect your business interests. This might lead to costs for the business later. Consulting a solicitor in the first instance mitigates this risk.

How can SMEs ensure that they are GDPR compliant? Why is this important?

Ensure that staff are appropriately trained and appoint someone as GDPR liaison within the company. Compliance is crucial as the Information Commissioners Office can issue large fines for companies in breach.

What are your top tips for someone looking to start their own business?

Get contracts written! Get insurance! Protect your Intellectual Property! Continue to seek legal advice from a commercial solicitor as the business matures.

How can we help?

The CJCH commercial team’s services span the full spectrum of corporate and commercial requirements. From startups to SMEs & large organisations, we provide legal support and advice to leverage opportunities and minimise risks to your business.

Get in touch via:

Telephone: 0333 231 6405

Email: commercial@cjch.co.uk