BUSINESS advice firm Deloitte says there is a “clear and urgent need” to generate growth among Yorkshire’s private sector firms – particularly in manufacturing.
While £143m has been earmarked to companies and organisations across Yorkshire in the second round of the regional growth fund – with Huddersfield-based David Brown Gear Systems and Severn Unival among those to benefit –Deloitte says more is needed.
Martin Jenkins, head of corporate finance at Deloitte in Yorkshire said: “It is great news that 24 projects or programmes across Yorkshire look set to receive a significant financial boost from the Regional Growth Fund. There is a clear need to generate growth in the private sector, particularly in manufacturing, and so this investment into the regional economy is very welcome indeed. The key for successful RGF companies will be to ensure that the funds they receive are used effectively as part of a fully integrated, overall approach to expansion and growth.
“We should also remember that many more businesses will need to look for alternative sources of funding and often the best place to start is with an internal review.
“Cost control and cash retention remain key priorities of many businesses in our region.
“Cost cutting should not simply be a tactical action to maintain cash flow, but should be part of an approach to create more flexible and efficient operating models for future growth and should therefore be an integral element of long term strategic planning.
“Additional liquidity to support growth can often emerge from an in depth review of working capital practices, going beyond simple debtor and creditor terms, to a full review of the business model, supply chain and logistics, invoice processing times and taxation efficiency.
“Improving financial controls often provides a business with the platform for improved performance and cash generation.”
Mr Jenkins said private equity firms offered significant funding for investment in the form of development capital and could provide a driver for growth.
“Many of the region’s most successful companies have benefited from the finance and expertise available from these organisations.” he said.
“The key is to ensure that companies have a full and clear understanding of their requirements, the different forms of funding that is available to meet them and how best to access it.
“That is likely to mean examining a range of funding options.
“Local Enterprise Partnerships, the Green Investment and Big Society banks and other business growth funds will have an important role to play in the future as smaller businesses continue to find securing finance from mainstream banks is challenging.
“Having a credible and realistic business plan will be vital to achieve funding in what is an extremely challenging market.”
