The challenge for business has never been sterner than it is now, with Covid-19, Brexit and a looming recession. It has never been more critical to insulate your business against the risks. Robin Koolhoven, partner in our restructuring and insolvency team, sets out some simple tips to bear in mind. The key is to be ahead of the game – proactive, not reactive:
- Cashflow management – the government assistance schemes such as furlough, CBILs and Bounce Back loans will come to an end. It’s essential that you prepare your future cashflow and understand where your cashflow problems may arise. Manage cashflow collection and shorten payment terms. Preparation gives you a chance to manage the issues.
- Change management – look at trading history, forecast future trading strength and weakness, and recognise which areas of your business need to change. Are staff levels correct? Can production savings be made? Do you need to change your focus? Make decisions for the good of the whole business.
- Contract management – ensure your terms and conditions are up to date and appropriate for Brexit. Revisit terms with suppliers – they need your business. Understand your customer’s needs.
- Information management – are you using market intelligence? What are your competitors doing and how are they coping? This market will provide opportunities to acquire, or merge with, other businesses. Communicate with customers, suppliers and competitors – knowledge is invaluable.
- Duty management – directors have duties and the focus of those duties changes as the financial fortunes of a business change. Consider your duties and seek professional advice. Minute your decisions and the reasoning for those decisions. Keep proper books and records.
Unless your business has been successful throughout the last 12 months, it could suffer in the next 12 months if you do none of the above. Now is not the time to stand still – now is the time to grasp the nettle and prepare your business for a healthy future.