7 steps to take now to help your business
Everyone now accepts that these are strange times and none of us have been here before. Each day brings its own developments with twists and turns. None of us can predict what the next few months are going to bring because of Covid-19 and Brexit.
To run a business during this time is difficult but there are some simple steps that you can take which may offer some protection.
Get timely management information
More than ever before, this is the time to make sure you have reliable data for your business. You can no longer rely on just looking at your order book and your bank balance. You need a bit more than that to feel in control. You need up to date figures on your business performance. With technology this is easily done without it being expensive or time consuming.
In fact the cloud accounting software available now does the opposite, it gives you time back, often saves you money plus gives you better information and above all puts you in control of your data.
Forecast your cashflow over the short and medium term
At this stage you should be looking at Q1 for 2021 as a minimum although we feel strongly that you should be looking at end of Q2 or Q3. Forecasting has become tricky as the business environment is forever changing but that does not mean we give up altogether and do no forecasting at all. What it means is that we must play out the different scenarios.
You need a robust and realistic forecast which will consider extra costs you may have incurred due to the pandemic plus any extra costs due to Brexit. There may be a fall in demand to consider and at different levels.
Doing this exercise alone possibly with a professional advisor will force you to look at your business in more detail and you never know, you may learn new things and implement positive changes to move forward.
We often get asked how often you should update a forecast, we would say weekly but if you do it monthly that is a great start.
Look at your markets post Brexit
Have you looked at your customer base and your markets recently? Has the Coronavirus changed the way your customers behave and if so, will the new behaviour stick post pandemic?
What about Brexit? Are you able to trade in the same markets?
And what about your workforce? Do you rely on workers from the EU?
These are some of the questions you should ask yourself and be happy with the answers your come up with or look at ways you can make changes to cope.
How resilient is your supply chain?
It is easy to assume that if you buy in the UK you will not be affected by Brexit. But where does your supplier source their materials from or their workforce? Have you had that conversation with your major suppliers and what provisions have you made for possible delays in January? There may be an impact on volumes available in the UK.
Will Brexit mean price increases from your suppliers and have you thought about how much of this you are going to pass on to your customers? Do you need to tell your customers?
If you are importing or exporting directly to the EU have you done all the preparation? Visit our Brexit pages https://www.myersclark.co.uk/brexit-news
You need to work with all your stakeholders and be open. If you are having trouble paying your bills right now talk to your landlord, your suppliers and HMRC. It is in nobody’s interest not to listen to you.
Similarly talk to your clients and customers. Listen to their concerns and think of workable solutions to move them forward.
When we come out of this it is those strong relationships that are going to count so take some time to invest in them.
Optimism is generally a good trait, most of us will say it is better to be a glass half full person but when it comes to your business right now do not be overly optimistic be realistic.
Many of you have lived through other recessions during the past so what did you learn from that experience. Apply what you learnt then now. In times of financial uncertainty is pays to be pragmatic and then look at the worst-case scenario.
Use your professional network
We as accountants want to help. We want our clients to survive 2021 and grow. We are your allies, and we have expertise and experience. You do not need to be in difficulties to justify a conversation with us. It is worth taking a few minutes to talk to us even if it just so that someone else is listening to your thoughts and ideas.
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