Businesses have a lot on their plate now! You have had a lot on your plate for the last two years. But our world is changing rapidly or so it feels. So how is your business going in 2022?
This year has brought different challenges. There is the threat of the “great resignation” where workers who paused their search for the next move during the pandemic will now be wanting to look for the next opportunity and move. Make sure you know what to do to retain your staff.
You could be dealing with disruptions in supplies due to Brexit and all the complexities it has brought. Two years after Brexit the long-term benefits are yet unclear but what is clear is that working with the European Union has become more cumbersome.
Then there is the constant threat of rising costs and inflation. This makes managing your cash and pricing difficult, right? We are hearing stories of price being set with your customer ahead of time only to later find out that your supplier is passing some of the higher costs on to you.
What about rising energy and fuel costs? How does that impact you?
We have the Governor of the Bank of England saying don’t ask your boss for a pay rise and then government ministers saying this is unreasonable. So where does that leave you as the employer? How will you deal with the pressures from your workforce to raise their wages?
Inflation has hardly moved during the last 14 years and most of us forgot that it can cause such problems. But fast forward 14 years, a pandemic and Brexit and here we are with an expected rate of 6% (CPI) by April 2022. It is a global issue.
Then there is the introduction of the new health social care levy here at home which is going to put more pressure on your cash-flow from April.
Now might be a good time to reassess your business and make sure you are ready for what’s to come.
What happens next in 2022
The International Monetary Fund (IMF) last month revised the UK’s Gross Domestic Product (GDP) upwards to 4.7% for 2022 and falling to 2.3% in 2023. This should indicate that our economy is recovering well.
But readiness for change is going to be key. Let’s look at the three key areas to help you be change ready.
Your Business Strategy
Have a look at your strategy. At the start of this year, we reminded you to look at your business strategy and see if it is in harmony with your personal goals.
Given the constraints we are all experiencing now with rising costs and resource issues (human or otherwise) have you relooked at your plans? Maybe not necessarily rethinking your goals but re-looking at the period?
According to a recent survey conducted by Small Business Index of about 1200 small businesses in the UK, 54% reported that they expected to grow this year.
However, operational costs have hit a 7 year high. As a result, there are now barriers to growth. Together with a skills shortage it makes things even more difficult.
Are your growth plans still feasible?
What about your current operations, are you in line with the budgets and forecasts? Have you set them? Do you want us to help? To provide an independent review?
Your Business Operations
These are your daily activities to make sure the business continues. It includes your sales, marketing, your finance, your team, your suppliers etc.
Two key areas where your business is likely to feel an impact is your workforce and data security. We look at finance separately under point 3. There are others of course like your supply chains but this can be very specific to your business.
When it comes to your workforce you need to show empathetic leadership which means you need to understand the needs of your employees.
If you are used to a more hierarchical organisation, then this could be more difficult. This might be an opportunity to delegate a bit more to the layer below. The advantage being each manager has a team they can connect with and truly listen to. Plus, people develop their own leadership skills.
Today’s workforces want to be listened to. Money isn’t their only motivator. They want to be trusted to do their job. In return they will become dependable and responsible.
You would have noticed in the newspapers recently that cybercrime is on the increase. The “situation” in Ukraine has put the UK on high alert.
You need to make sure that your computer systems, servers, and data are all well protected.
We are not experts in this field, but we know people that are.
If you need specific advice in this area and don’t have anyone looking after your IT let us know. We can recommend someone.
Many banks organise cyber security awareness webinars for their customers. You should attend them regularly because things change. Cyber-attacks are getting increasingly sophisticated.
Is your business still viable in 2022?
As we face the storms that are coming, some of you may ask “is my business still viable?”
One of the first signs of distressed businesses is when you start running out of cash. You can’t pay your bills on time. During inflationary times predictions become difficult sometimes but none the less you should regularly update your cashflow forecast.
Attention to your cashflow is key because no matter how profitable your business, if the cash dries up then there are difficult decisions ahead.
So, Why is it important to have a cash flow forecast?
By monitoring your cash regularly and seeking help quickly from your accountant and other professionals can make all the difference.
When there is a problem, there are always solutions, but you need to know about it first. There may be ways to make arrangements with your creditors, use Time to Pay with HMRC or get some more finance etc.
It sounds simple but sometimes in life it is the simplest things that cause the problems.
You might not want to face the fact that the business may no longer be viable for various reasons. Your business is what you have worked so hard for over the years and maybe you find it difficult to decide what to do next. But you are not alone.
We want to work as your partner, to help you where you need help. We’ll provide you with the impartial support that you need and challenge your way of thinking when needed.
Call your regular director today if you need help or if you just want to talk about your business in general. Call on 01923224411.