Resilient

Building a stronger, more resilient business

 

Inflation is still higher in the UK than in many other rich nations so interest rates may yet stay higher for longer.

So how do you give your business the best possible chance of getting through the next couple of years – and even becoming stronger?

As a business owner myself, I’ve detailed below what I can consider three essential requirements to building a stronger, more resilient business. I have done these myself and it has, and is helping.

I have also seen the positive impact it has had for our clients.

The three essentials are:

1. A business continuity plan.
2. A 3-month cash flow forecast
3. A 12-month profit forecast

And…I’ve added a fourth requirement which you should also do!

 

Why you need a Business Continuity Plan

A plan will give you peace of mind and clarity for decision-making for the future of your business.

It will ensure you maximise opportunities to preserve your cashflow and profitability.

It will provide certainty and peace of mind, giving you a degree of control over what is happening

It will help you move away from the fear zone – the uncertainty of what is happening with the economy.

Into the learning zone where you will understand the support that might be available.

From there you can move into the growth zone where you start to build a more resilient business.

 

Why you should prepare a 3-month Cash Flow Forecast

It will force you to manage expenditure:

• What is essential for the business that you need to keep spending
• What is a ‘nice to have’ that you can do without
• What costs are luxuries and aren’t needed right now

If you have outstanding amounts owed by your customers, it will encourage you to collect those payments. But be mindful, your customers may currently be struggling too.

 

Why you need a 12-Month Profit Forecast

You need to prepare a forecast based on the information you have right now and where you want the business to get to in 12 months’ time.

It will allow you to see:

• The amount of new business you need to generate
• The profit margins on delivering work that you need to aim for
• The costs in your business you need to reduce or work hard to control

This should be a rolling 12 month forecast, always looking 12 months ahead to enable you to implement any changes to give you the best chance of hitting your targets

 

And…

Why you should meet with your Accountant on a regular basis

To review business performance, discuss problems and issues you are facing and to identify and implement actions to enable you to overcome those problems.

The setting of actions is essential to keep your business moving forward.

The review of business performance is crucial, you need to be held accountable – in a positive way for how you and the business are performing.

For these meetings you to need to identify and discuss:

• What do you need to START doing that you haven’t been doing?
• What do you need to KEEP doing, the practices and habits that are having a positive impact?
• What do you need to STOP doing, those activities which are holding you back?

Accountability from an independent person (not your spouse!) will help you act on and implement the positive actions which you know will benefit you and your business.

If you would like to find out more about how to make your business stronger, please get in touch.

A Telfords Accountants Blog , more here