Deal or no deal time to give your company a health check.
It is hard to avoid the negative press surrounding what or will not happen regarding Brexit. The truth is that no one can be really sure what the outcome will be but during these times of economic tension giving your company a bit of a health check could help you weather the storm.
Know your numbers
You have a responsibility as a director to ensure your business is prepared for a potential downturn and this includes knowing and understanding the numbers.
Prepare a simple cash-flow forecast – estimate your sales for the next 3 to 6 months and KNOW what your fixed costs are.
Make sure you are paid on time, make it your business to know who owes you money.
Do not wait until the debt is 30 days old, touch base with your customer, check they have your invoice and ask them to confirm when it is scheduled to be paid – get any queries resolved before the invoice is due for payment.
If a customer owes a couple of invoices and is struggling to pay you, ask them to pay you a smaller regular amount. Consider them paying you cash on delivery until their financial position improves.
Are you getting the best deals from suppliers – look around, can someone else supply the same or similar service perhaps for better terms?
Question how things are done
Sometimes it is difficult for Directors to make changes when they are needed, scared of upsetting the status quo. Take the opportunity the re-evaluate all your systems and processes. Is your marketing effective? It’s tempting to cut marketing when times are tough but research shows that those that continue or increase their activity bounce back quicker than firms that cut marketing budgets in tough times. The trick is to ensure your marketing is strategic and in line with your company objectives.
Look at your teams, have you got the right people in place? Are you playing to their strengths, a redistribution of workload ensuring tasks are allocated to those that do them best, can create efficiencies and could help avoid any nasty cost-cutting decisions.
Speak to your accountant if you have questions on how to prepare a cash-flow, they may be able to provide a cost-effective solution – you’ll be surprised at how much knowledge and guidance they can provide.
Open your post, do not ignore threatening letters – engage with the creditor – see if you can come to some informal agreement or get advice if you are struggling to find a solution.
Use the fear of uncertainty to get your strategic business plans updated. Include alternative scenarios with action plans to tackle all the possible outcomes, this will help you move swiftly with any changes necessary without making knee jerk and possible poor decisions.
If you do find your business it difficulty the key is to get advice early on. If you or your clients need advice please get in touch with the Bretts team.