According to the latest BDRC Continental SME Finance Monitor covering the first three months of this year, 48% of small businesses were classed as permanent non-borrowers (PNBs) – an increase of 8% on the previous quarter. PNBs are businesses that have not used external finance in five years and have no plans to take on debt in the future.

Whilst it’s laudable that small businesses are managing to avoid borrowing, there is some concern that they are being too cautious. Of course, it’s hardly surprising if they are given the pain and uncertainly caused by the recession, but not borrowing suggests that opportunities for growth and greater success could be being overlooked.

How do you know it’s time to bite the bullet and invest some money in your business to grow?  Here are seven clues that shouldn’t be ignored.

#1. When out-dated equipment is holding you back

If your office equipment or machinery is failing or regularly breaking down causing downtime and missed deadlines or not meeting customer demand, it’s time to invest in better maintenance or new equipment all together.

Similarly, if your equipment is on display and is looking dated and worn out, it creates a very poor impression, especially if you’re providing a service with that equipment. Customers expect you to be using up to date equipment and will take their business to companies who do.

#2. When processes are slowing your down

As a small business it’s understandable that you may be slower in certain parts of the business due to limited resource. But if you find that you’re getting slower at taking orders or battling slowly through administration issues on a daily basis, then it’s time to invest in software or other ways that help you streamline the process. Making your processes more efficient will enable you to put more time into helping the business grow.

#3. When your competition is getting ahead

Competitor intelligence, even for small businesses, is an important growth strategy and key to keeping your customers and also winning customers from them. A rebrand, new premises, new products or services, a new advertising campaign, an increasing social media presence, and a recruitment drive are all signs that your competitors are doing well and investing in their business too.

#4. When your workplace is feeling cramped

If you have outgrown your premises, that’s a very positive sign. But working in a cramped environment can have a negative impact on staff both physically and psychologically, affecting their health and performance.  Whilst moving to larger premises is expensive, a better functioning workplace could boost morale and productivity. It could also influence sales too, by looking more professional and inviting to customers.

Liberis customer, Chris Whitton, founder of hot tub company, Exotic Palms and Spas in Gillingham, Kent increased sales by 50 per cent by moving to larger premises.

He sells an experience – a peaceful and relaxing time friends and family - but the original showroom was small, cramped and didn’t convey peace or luxury. He had put the move off for years after being turned down by his bank for funding, but wishes he’d looked for alternative funding sooner as it’s made such a positive difference to his business.

Chris Whitton, founder of Exotic Palms and Spas, increased sales by 50% by moving to larger premises to create the right environment for customers

 #5. When your marketing isn’t driving business

If your marketing isn’t driving business, then it must to be reviewed and If you don’t have the right skill set in your businesses to put it right, then it’s time to invest in someone who can. The investment could be recouped quite quickly if you get your strategy and tactics right.

If you want to reach customers and stay competitive, as an absolute minimum, your website should be very well optimised and you should be active on social media. You don’t have to hire expensive agencies, freelance marketing and social media specialists can offer very good value for money and advice can be bought by the day or hour.

#6. You don’t have enough staff or the right staff

Turning work away or delivering orders late because you haven’t got enough of or the right resources to meet demand is a sure sign you need to invest in recruitment or training. Both of which can involve significant investment, so it’s important to see if changing the way you do things currently is causing the problem and it isn’t really a resources issue. If the new hire or training course is to help meet growing demand, the return on investment should be quite quick.

#7. You’re lacking innovation

In order to stay ahead of the curve, you need to be innovative. Small businesses need to apply this concept more than ever if they want to compete against larger businesses with bigger budgets.

As part of your business model and growth strategy, there comes a time where you need to let innovation and new ideas lead the way. The level and type of innovation depends upon your business, but this might include things such as research and development, use of technology or the creation of new products or services.

It’s important be able to spot the signs that your business needs investment. There are many  examples of previously great businesses which have foundered, shrunk, become obsolete or been bought by rivals because they didn’t – Blockbuster, Eastman Kodak and Nokia to name a few.