The beginning of a new year is an opportune time to undertake basic business planning. One aspect that needs continuous management is to protect your business capital.
The downturn in global trade continues to be affected by the war in Ukraine, the situation in the Middle East and now the disruption to movement of goods in the Red Sea. This is compounded by persistent inflation, high interest rates and consequent increases in costs.
In the face of these challenges what can beleaguered business owners do to protect their capital base and be in a position step back into the ring as and when consumers start to edge out of their front doors and start spending?
Here's a few ideas for you to think about:
- List all of your fixed costs, those that you have to pay even if you have no income coming in and cancel as many as you can that can be re-established when markets open up again. Obviously, many will be tied to contracts that cannot be broken. In which case:
- Contact suppliers, landlords, service providers etc., and see if you can negotiate a moratorium on payments for a period, a reduction in payments or the cancellation of contracts.
- When this work is done rework your business plan for the next year and speak to your bank or other sources to secure any cash required to meet the likely dips in cash resources.
- Importantly, start to think about waking up your business when consumer interest in spending starts to increase demand for your goods or services.
And finally, speak to us. There is no substitute for sharing this planning process with your professional adviser. We know your business. We know how you have burned the midnight oil to develop your business and the problems you have overcome along the way. We can, and we want to help. Call now so we can start to consider your options.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.