There used to be a time when the media regarded the summer period as the silly season. Well, the events of recent weeks can hardly be said to have fallen into that category. Scenes of riot and violence, damage to property and disregard for the law, coupled with the frenetic activity and immature judgements in the markets hardly make for a climate of business confidence writes Melanie Richardson, Head of Corporate Business at top local accountants Swindells.
As our economy struggles to recover from a damaging recession many businesses face real difficulties and challenges. Some say the worst is yet to come and if that’s your attitude, you are probably right! Bob Diamond the oft maligned CEO of Barclays however, pointed to the 41% growth in his bank’s business customers’ credit balances saying “These are successful businesses generating profits and cash but they lack the confidence to invest.” At Swindells, although we see businesses who face difficult times there are plenty who continue to make good profits and have growing balance sheets.
So is it a question of “Keep Calm & Carry On” or “We are where we are so just get on with it” – is this really a strategy? I firmly believe that there are really good opportunities for growth out there right now, particularly where that growth comes from buying out a competitor or entering into a strategic alliance. From our own contacts, we know that there is certainly no shortage of cash for the right deal from willing investors and there are banks that, despite the uncertainty in their own sector are actively looking to support good propositions.
If growth through acquisition or merger is not on the agenda, too often business owners fall into the trap of just ploughing on with heads down but this is a strategy to nowhere! So in difficult times what are the priorities?
It is even more essential to look after customers and make sure you are providing the goods and services they want, at the right price. Some business need to cut costs but this must not mean putting up the shutters and digging in – losing sight of the customer is the surest way to failure.
Cash flow is the life blood of a business, your ability to continue trading is determined by the contents of your bank account not your profit & loss account.
Resist all temptation to reduce sales & marketing activity, there are many customers out there looking for good service, competitively priced, provided by well run businesses with a positive attitude. Now is not the time for unwise decisions but actively to plan and create strategies for the future.
For help and advice with business growth, buying and selling a business or fund raising contact Melanie on melanier@swindellsaccounting.co.uk
