Some of us have been in business for very many years and have survived and even thrived during recessions. However, although we can learn from history every recession is different. For the first time in many years we have rapidly rising inflation and rising interest rates. Although some of this may be due to war and global warming, neither are likely to be resolved quickly. The resultant fuel crisis and world food shortages are likely to continue for some time. The inflationary consequences will have a significant impact on all businesses.
The likely effects
- A drop in real income;
- An increase in expenses;
- Tensions within the business both between members of management and management and staff.
What should be done
- Make sure that that you have sound and sensible experienced advisors.
- Make sure that you are aware of your business income and expenses and have suitable projections and keep them measured and updated.
- Make sure that you have suitable documented agreements and policies in place both for internal purposes between management and with staff and also for external financial purposes. Significant organisations from which you may seek assistance such as the Government, Banks and other financiers like documentation so that they may tick their boxes. You need them for your own protection.
- Do not panic. Be confident in your own business.
- Continue to market. Income is everything.
- If necessary, look to cut expenses but avoid cutting expenses that will hinder your income, service or reputation, if possible.
- Be open about your own position with those who it may affect, such as your landlord, bank and staff. Individuals and institutions do not like surprises. They are more likely to be sympathetic if you are open with them. Your professional advisors may help you with this.
- Be aware that he vast majority of legal assistance provided by changes in the law during the coronavirus pandemic no longer exist. There is no moratorium on statutory demands and insolvency. Such rental schemes as there are, or remain are complex and not applicable to all occupancies. Government help with fuel bills for business said to start on 1st October 2022 currently only has a six month time horizon.
- Make sure that you are aware of your own financial and legal position and have the correct documentation in place for your business.
- Check that your advisors are suitably experienced and are willing to help you and on what terms.
- Do not be afraid to ask for help. Talking to a professional advisor with suitable experience and knowhow is always of assistance.
- Do not leave it until it is too late to seek help. Plan, prepare and anticipate.