As issues over the United Kingdom economy is matter of concern for families and businesses, it’s essential that every business, notably small to medium-sized Ltd companies and sole traders are properly ready for financial and cash flow management.
Sustainable and profitable business is usually vital during recession times.
The following steps will assist you and your firm during economic recession and at times when inflation is high and economic growth is very slow. If your business is struggling with standing cost of repayments on your loans, business cards, HMRC Tax debt, BBLS repayments, it is recommended to seek expert debt management advice before your business struggle to cope up with cash flow issues.
Step 1. Re-structure company debt and pay priority bills first
It is likely that your business may face difficulties if you as key person (Key shareholders) allow business debt to accumulate more than current affordability and regular business income simply unable to cope up with repayments.
Please ensure that you pay priority bills first (Rent,Mortgage payments, Rates, Utilities, Wages, Business Insurance and associated regulator fee etc).
It is also important that your business amend your service fee terms to accommodate current inflation rate (CPIbased) into account and make it part of your terms of business. It is essential for your business as it will keep current cost of business in line with inflation.
If there are cash flow issues re-curing in your business despite of keeping priority bills paid, please seek advice from debt advisor.
Step 2. Manage your existing clients first
It can be difficult to attract new business during an economic downturn and especially when the inflation rate is at 9.9 % (Last 12 months to August 2022).
BOE is expecting inflation rate to rise at peak and to reach by 11 % by end of October 2022.
As a business owner, it is vital that key persons/shareholders focus on managing their existing customers with more attentiveness and provide them better customer service. It is very important if your business/service model is based on recurring monthly service income.
a. Do not give high discounts
It can be difficult for a small business to understand that providing huge discounts at the time of recession can bounce back and can slow business growth and income. Kindly note every business has a standing cost every month to run as minimum. If you offer high discounts and regular waiver in your service fee, it is likely that your business would have to stick to discounted pricing as your customers would love that price and in case if the service fee/price go up ,your customers may try to find alternative solution provider.
b. Put more focus on Marketing your services
Many businesses curtail their advertisement and marketing budget during economic recession, actually it must go up to remain afloat in the market.
It is essential that your business diversify its advertisement budget into various segments and marketing techniques specially SEO and Social media platforms. It may be helpful to chalk out a detailed plan with a local business growth expert, specially an online expert.
Step 3. Keep your staff happy and energise them
Do not carry excess baggage in business, keep your existing team members motivated and happy so they could focus on their work.
It is important to retain your staff during recession times as it is challenging to train new staff for a particular role and it can be cumbersome if there is high employee turnover.
It is vital that your business become a smart business.
Step 4. Business Growth and Debt Management
Planning is significant for the success of your business. you wish to set up the changes which will strengthen your company against difficult times, and the way those changes are going to be placed into action.
Our team will work with you to set up for your business future, giving recommendation on business management and HMRC tax arrears management and personal debt management to set you debt worry free.
Contact me @ email@example.com or 0203 318 0990 and that our team can assist you, your business and your family be financially prudent and manage your personal and business debts, regardless of the UK economy’ future holds.