The cost-of-living crisis, events in Ukraine and Brexit uncertainty are all big factors in making the current trading climate what it is. Furthermore, inflation is predicted to reach up to 9% this year, which will most likely provide the ultimate test on corporate resilience.
These issues are not just hitting businesses, consumers are also feeling the squeeze due to a notable reduction in real household disposable income.
However, whilst there are clearly challenges ahead, I believe UK businesses are more resilient than ever after riding the wave of the harsh economic impacts of the pandemic. Whilst businesses prepare for their next challenge, the following are some recommended actions that business leaders can take to once again, make it out the other side:
Identify your core metrics and KPIs
Those who understand all aspects of their business and finances, will be the owners who cope the best with the challenging upcoming months.
Ensure you are prioritising the right KPIs that are paramount to the survival of your business as for the time being, additional goals may have to take a back seat, especially if you are expecting to struggle through these times.
Evaluate borrowing options
With interest rate increases expected from the Bank of England, consider looking towards fixed rates and fixed term loans from finance companies like ourselves!
Review your pricing
Are your current margins survivable with an increase in input prices? Do you need to pass down the extra cost onto customers?
Ensure you find the right balance of not putting customers off your product or service because of a high price, but also not struggling due to unprofitable products or services.
Scrutinise your cash flow
The demand for working capital over the next year is likely to be exceptional, so make sure you are operating at a safe level of liquidity. Prioritise having a clear cash flow forecast as this will enhance your ability to review how your business is able to generate cash. Review your company’s capacity to identify quick fixes for cash flow if required. A great way to manage cash flow, especially with the Self-assessment tax bill deadline approaching, is to use a business loan with 6, 10 or 12 month repayment terms available.
JR love helping UK businesses, if you are looking at a standard business loan or asset and equipment finance, let us help you today. Call today 0161 429 6949.
