The latest indicators for the UK economy and society
The Office for National Statistics has announced its latest experimental data on the economy which shows nearly half (48%) of currently trading businesses reported that their turnover had decreased below what is normally expected for this time of year. This is not a surprise given the Pandemic.
So, if you are running a business and turnover is down, what should you be doing to ensure resilience?
Clearly we are living in tough times and it makes sense to take advantage of Government supports both directly such as the job retention and new support schemes, deferring tax and using bounce back loans. There are also grants available to help firms with Brexit changes for import and export administration.
We have helped many businesses apply and claim these supports and if you need any assistance please contact us.
Business planning for the unknown can be very difficult but there are some practical steps you can take to minimise potential disruption to your business:
- Review your Budgets and set realistic and achievable targets for the remainder of 2020 and into the early part of 2021.
- Get your employees involved in a discussion of likely trading conditions and get their input on reducing costs and maintaining revenues.
- Use ‘bottom up’ budgeting where everyone in the business gives input on areas over which they have control – target a 10% cost saving.
- Review and flow chart the main processes in your business (e.g. Sales processing, order fulfilment, shipping etc.) and challenge the need for each step.
- Encourage team members to suggest ways to streamline and simplify processes (e.g. sit down and brainstorm about efficiencies and cost reduction).
- Put extra effort into making sure your relationships with your customers are solid.
- Review your list of products and services and eliminate those that are unprofitable or not core products/services.
- Review efficiency of business processes and consider alternatives such as outsourcing certain activities locally or overseas.
- Agree extended payment terms with all suppliers in advance.
- Pull everyone together and explain the business strategy and get their buy-in.
Please talk to us about cash flow planning for the next six months, we can help with a template so you can do this yourself or work together to produce estimates for a variety of scenarios.