Millions of businesses and households are struggling with their energy costs, alongside increases in general taxation, the cost of council tax, water bills and other utilities.
Is it all doom and gloom or can you plan forward and make adjustments in, and to, your business to factor in these changes?
Our experience tells us that business owners are a resilient bunch and those that are the most successful are also flexible in their planning. Here are some of our recommended actions, based on what we have seen other clients doing recently to firm up their resilience to these tough times:
- Review your budgets and set realistic and achievable targets for the remainder of 2023. Know your cash flow forecast inside out.
- Review your debtors list and chase up overdue invoices (if appropriate). If applicable, offer existing debtors extended payment terms and/or discounts.
- Make sure your terms of business contain explicit payment terms.
- Assign responsibility to one individual for invoicing and collections.
- Put extra effort into making sure your relationships with your better customers are solid.
- Review your list of products and services and eliminate** **those that are unprofitable or not core products/services.
- If appropriate, review banking facilities and discuss future needs.
- Know what you are spending and on what. Look at your detailed expense list in your profit and loss account and assess if there is room for negotiation in any of your fixed expenses and/or whether there are alternative suppliers.
- Review and flowchart the main processes in your business (e.g. sales processing, order fulfilment, shipping etc.) and challenge the need for each step.
- Encourage team members to suggest ways to streamline and simplify processes.
- Review efficiency of business processes and consider alternatives such as outsourcing certain activities locally or overseas.
- Establish your key performance indicators (KPI’s) and measure them on a weekly basis.
- Pull everyone together to explain the business strategy and get their buy-in.
The British Business Bank’s Guide to building business resilience contains impartial, practical, and actionable information and support to help smaller businesses manage their costs, boost their long-term profitability, and increase their resilience.
There is guidance on everything from energy efficiency to investing in technology, included to help make your business more innovative and resilient.
Other topics covered in the guide include:
- Foundations for growth,
- Managing business costs,
- Securing funds and controlling debt,
- Focusing on customers,
- Optimising your supply chain, and
- Controlling staff overheads.
See: Guide to building business resilience - British Business Bank (british-business-bank.co.uk)
Chancellor Rachel Reeves spoke last week at a meeting of EU finance ministers as part of the government’s attempt to perform an economic reset with the EU. It was the first time a UK chancellor has attended such an event since the UK left the EU.
HM Revenue and Customs (HMRC) have announced the launch of a new interactive online tool and clearer guidance for those who are already self-employed and those considering it.