Building Business Resilience in a challenging and inflationary world
The British Business Bank’s guide to “Building a foundation for growth to help your business thrive.”
In a recent article we looked at the most up to date Insolvency Service data for insolvencies (Q2 2023), which showed that insolvencies in England and Wales were at their highest levels since 2009. The reasons for this are well known: the debt hangover from Covid-19, rapid inflation, high interest rates and supply chain problems being the main culprits. As a firm of Insolvency Practitioner’s, it’s our job to wind-up companies as painlessly as possible when there is no other alternative. If a company can be saved, that is always our first priority, using insolvency procedures such as Administrations and Company Voluntary Arrangements and also through turnaround advice for companies that are feeling the heat but aren’t yet insolvent.
But what steps should businesses take in the current challenging era of high inflation and static or negative growth? We have come across the British Business Bank’s Guide to Building Business Resilience, which we think should be really useful for businesses, especially small business owners, in preparing to keep afloat in today’s very challenging economy.
As the British Business Bank says,
“Our Guide to building business resilience contains impartial, practical, and actionable information and support to help smaller businesses manage their costs, boost their long-term profitability, and increase their resilience.”
In summary, the key topics the guide covers are:
- Foundations for growth. These include: managing costs, controlling energy costs, securing funding and controlling debt, focusing on customers, optimising supply and logistics, controlling staff overheads, investing in technology.
- Building business resilience. Things to do in this area include: consider only raising the prices of best-selling services and products rather than across the board, resist the urge to raise wages to unaffordable levels, consider using your accountant or other professional advisor to identify areas that need improvement,
- Managing your business costs. Steps include: identify cost savings and minimise where possible, reduce your inventory, focus on customer loyalty, pool resources, where possible, with other companies.
- Manage energy costs. The following steps are important: understand exactly how much energy you use and when, identify where energy savings can be made, review energy suppliers, consider renewable energy alternatives.
- Securing funds and controlling debt. Talk to an expert who can help find the right finance for you: asset-based lending, invoice finance, leasing and hire purchase, peer to peer lending, direct lending fund, overdrafts and credit cards.
- Focusing on and attracting customers. These steps are important: know your customers, utilise effective marketing, attract new customers with discounts, price-matching with competitors, time-limited flash sales, use testimonials to attract new customers.
- Optimise your supply chain. Some key things to consider are: keep shipping costs down by reducing weight, using the right sized packages and using flat-rate shipping where possible; keep your supply chain working effectively by negotiating the best payment schedules you can, and consider moving to just-in-time deliveries to reduce warehousing and storage costs;
- Controlling staff overheads. For recruitment costs, keep costs down by: using social media, getting staff to act as advocates, use an Applicant Tracking System, introduce a recruitment referral scheme, consider hiring apprentices; improve staff retention though training and upskilling; outsource where suitable – payroll, IT, HR and marketing for example.
- Investing in technology. Consider: cloud-based services, broadband, business support, smart technology.
How can Insolvency Practitioners help?
All of the above can help play an important role in building a business’s resilience in the face of the current very challenging economic climate. However, if you think your company is showing signs of financial distress and, despite all your efforts to improve resilience, is heading for insolvency, then the earlier you contact us the better. The early warning signs of business failure are:
- Poor cash flow
- High interest payments on loans
- Overdue payments or non-payments from customers
- Increasing debts
- Declining sales and profits
- Inability to pay bills or meet payroll
- Falling margins
Our turnaround business services include:
- Conducting a thorough analysis of financial statements and cash flow
- Develop a realistic financial forecast
- Recommend (and help implement, if required) a plan to improve cash flow and reduce costs
- Helping to negotiate with creditors to reduce debts and improve the financial position
- Debt consolidation and creditor negotiations
If, after exhausting all options, the business is no longer viable, we can help you close your business in an orderly and legal manner and help you minimize your losses.
Free Initial Consultation
We offer a FREE initial consultation without obligation and all enquiries are confidential. ABc offers big firm expertise at sensible prices that is appointment taker lead. We fully support the proposition “Always use fully qualified and regulated Licensed Insolvency Practitioners.”
If your business, or a business that is a client of yours, is facing financial difficulties, please contact our insolvency practitioners or call us at any of our offices:
Also, K&W Recovery, trading as Antony Batty and Company, Thames Valley: