Recovering from the holiday season can be a difficult time for many businesses too. For example, firms in the services industries will inevitably forego two weeks of turnover, whilst still incurring costs. Wholesale businesses will go from peak to trough as their customers have no desire to purchase new stocks until they have released the cash tied up and sitting in the warehouses and stores.
Unfortunately, this year many others may have simply been affected by one off-costs or disruption resulting from the weather and flooding.
Businesses within an ecosystem of supply and demand cannot be fully insulated from those around them, nor can the ecosystem itself be immune from macro-economic ebbs and flows and political grandstanding. From a macro-economic and political level, mixed messages are being delivered and some may be viewed as negative:
- Another £25bn of austerity cuts on the horizon;
- A potential 15 per cent increase in congestion charging in London; and
- An expected increase in the cost of British Debt.
Whilst some may be viewed as positive:
- Interest is said to remain at 0.5 per cent (BoE Base Rate) for 2014;
- The latest British Chamber of Commerce survey is full to the brim with encouraging statistics;
- Growth appears to have been greater in 2013 than first announced; and
- The confidence of the SME demographic is increasing.
On balance, it seems things are looking up for SME businesses. However, it is possible that your business may need a kick-start after the holiday period in an analogous way to that which you or I may. If it does, what are you going to do to turn it around and get it back in shape, fighting to keep fit?
Will your business be strong and sustain its New Years’ push to become leaner and meaner, into February and beyond? And how is that achieved?
The answer is careful, diligent and timely planning – such as:
- Identifying potential growth markets, strategies for growth and funding required;
- Identifying areas of the business that can be made leaner;
- Considering if your present business model is still appropriate;
- Analysing the working capital cycle and your costs of capital;
- Undertaking an analysis of your key markets and of those around you;
- Budget setting and financial forecasting; and
- Developing an effective marketing strategy.
The generic list goes on and on but in reality, different businesses and industries have different goals and priorities to plan for.
I’ve been thinking about how I can be one of ‘the robust’ that makes it through February and beyond. I don’t know nutrition and I’m certainly not an expert in exercising! With my work commitments, I don’t have the time to become an expert in these topics either; so this year I have hired a personal trainer.
Sometimes we can do it alone but sometimes we need experts who can identify our strengths and weaknesses and show us where we improve. Whether it be a an advisor, accountant or strategy expert – especially at this time of year, having someone to give you guidance on bad habits that can help you achieve your goals in the long run, is certainly something worth considering.
Jason Brookbanks is Senior Administrator at chartered accountants, HW Fisher & Company.
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