In this series of blogs, we will address some of the issues faced by growing owner managed businesses in the brave new world of the UK leaving the EU.
What the future holds remains uncertain, however there’s steps you can take to ensure your business is ready to adapt where and when it needs to. Following on from ‘Seizing the Opportunities of Brexit – Parts 1, 2 & 3’, this Insight will focus on more possible opportunities and solutions for growing businesses.
Get your facts straight
To take advantage of opportunities, unique knowledge is priceless. Think about carrying out a knowledge stocktake of the facts and figures for your business. These could be in your KPIs. For example, you could calculate the conversion rates of your quotes-to-orders by contract type or product margin, to see which quotes are the real money spinners; you could look at the stock aging to see which items are sitting dusty on the shelf and could be sold off to create cash and capacity; or even review the lease on your premises to see when there is a break clause to renegotiate the lease terms or move to a better space.
Right tool for every job
As a business changes, the tools you use may also need to change. Good cash flow forecasting can be essential for business change. Most experienced accountants in business run 13 week rolling cash flow forecasts, updated at least weekly. It’s 13 weeks because in any 3 month cycle most businesses have rent and VAT to pay as well as the normal more regular outgoings. With this you can plan for the stretch of a changing customer need, avoiding potentially very expensive emergency funding.
Stick to what you are good at
The facts and figures side of business may not be your strength. Rather than do it badly, or even worse ignoring it, consider getting in a professional who will do it well. Even if all you can afford is 1-2 days a week, having an accountant experienced in cash flow and business operations can make a huge difference to your ability to run the business well. NEL investee businesses benefit hugely from our ability to understand their finances and help them find the right cash management advice.
If you want to strengthen your cash flow to plan for changes within your business, contact us with your plan and see if we will make it happen.
For more insights into growing a business see our website.