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Compete or get beat - can you risk delaying investment in new IT equipment and technology?

Compete or get beat - can you risk delaying investment in new IT equipment and technology?

In today's digital age most businesses accept that having the latest technology and equipment is vital to stay ahead of the competition. But according to research conducted by software provider Exact, the gap between SMEs who believe in changing with the times and those who are actually prepared to keep up is widening.

Exact's findings reveal that 38% of UK SMEs believe their business may face closure unless they adopt a digital strategy, however only 2% have actually done something about it.

This is especially surprising given that almost two thirds (64%) of the SMEs surveyed admitted they face competition from new digital-savvy firms in their market, yet only 6% said they are investing in new technology to keep up.

New financial year brings new opportunities

SMEs will face numerous business challenges and much uncertainty in 2017. But with the new financial year approaching for many, this presents an opportunity to leverage the latest advances in IT to increase productivity and secure significant growth by retaining and attracting new customers.

The key question businesses must ask themselves is not have they considered purchasing new IT equipment and technologies, but can they afford not to any longer?

Choosing to run a business on outdated and unreliable IT infrastructure is a sure way to get left behind. Doing nothing also brings added cost complications stemming from using inefficient, standalone systems that are possibly no longer supported.

From cloud-based services, mobile apps and business analytics solutions, technology is no longer a barrier for SMEs who wish to compete with bigger, more established players. But deciding how to fund significant investments must be considered carefully - choosing the wrong option could restrict your business's ability to access the latest technology when you need it the most.

Benefits of asset finance

IT budgets can often constrain a business's growth due to the need to carefully manage cash flow and available working capital. Electing to pay for new investments upfront in one lump sum can be cost prohibitive. In contrast asset finance products from trusted alternative providers, such as Wesleyan Bank, can help.

These flexible, payment over time solutions can be used to fund all types of IT asset investment including software, hardware and associated maintenance and support costs over a period from one to five years.

By spreading the cost over a fixed term, asset finance represents the cheapest way to fund major IT projects and ensures that businesses do not have to fall behind in being able to benefit from new technology developments so they can continue to flourish.

A case in point - Jungle V.I.P

Husband and wife team, Evana and Mani Khan, founded the Hounslow based children's indoor soft play centre - Jungle Versatile Indoor Play (V.I.P) - in 2014. They saw demand for a children's amusement centre that had a more intimate and homely feel than similar amenities in the area.

Evana and Mani identified that pioneering interactive gaming technology (BEAM) would enhance the centre's play experience by using an overhead device to project interactive games onto a mat, giving children both physical and fun activities. 

Whilst they could envisage it being a good fit at the centre, the proprietors were unable to fund the purchase of the BEAM technology alone so early into their business venture. In partnership with SM Systems, Wesleyan Bank was able to offer Jungle V.I.P flexible payment terms and the ability to lease BEAM.

The centre could then pay for it month by month over a few years, and exclusively own it at the end of the payment period. The solution included installation and maintenance costs too, meaning a single payment plan from the start allowing Jungle V.I.P to budget for it accordingly.

"Jungle V.I.P is still in its infancy, so retaining and growing our customer base is a top priority. Acquiring the BEAM solution early and being trendsetters has really differentiated our business and drawn in children who like the fact we have something different," said Evana Khan.

The Annual Investment Allowance

As well as exploring alternative asset finance options, SMEs should seek to take advantage of the Annual Investment Allowance (AIA). The AIA helps businesses to write off the cost of certain assets against profits in the year of purchase up to £200,000, bringing much quicker tax relief against capital expenditure compared to spreading the relief over several years.

Most assets purchased for business use will qualify as expenditure, with the exception of cars and items either gifted or owned prior to the formation of a business.

Embracing the future today

In today's volatile business environment, IT investments need to be smart. Technology evolves fast and SMEs need to be equally as fleet-of-foot in accessing modern systems to maximise efficiency to differentiate their services in a way that their customers now demand.

Bespoke asset finance solutions allow businesses to gain rapid access to the equipment and technology they need, when they need it, to take advantage of emerging market opportunities without being inhibited by large upfront costs.

'WESLEYAN’ is a trading name of the Wesleyan Group of companies.

Wesleyan Assurance Society and Wesleyan Bank Ltd are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Wesleyan Financial Services Ltd, Wesleyan Unit Trust Managers Ltd, Practice Plan Ltd and DPAS Ltd are authorised and regulated by the Financial Conduct Authority.  Advice about investments, insurance and mortgages is provided by Wesleyan Financial Services Ltd.

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