It’s been a tough couple of years for UK businesses.
It was reported that, in the retail sector, 50 shops a day closed in the first half of 2021, whilst nearly two-thirds of small businesses saw their revenue decrease as a result of the pandemic with 44% having to cut jobs.
But as 2022 approaches, things are looking up. In fact, after a -9.9% fall in GDP last year, 8.2% growth has been predicted by the end of 2021, with a 6.1% growth in 2022.
Here at McAlister & Co, we are business turnaround specialists – so, without further ado, as the world emerges from the other side of the COVID-19 pandemic, here are our top tips on how to get your business fighting fit for 2022 and beyond...
Take these six steps to ensure your business is ready for 2022:
1. Reflect on the year
The first step towards getting your business ready for 2022 is to look at the previous two years and see how much you have been affected by the pandemic.
Look closely at your accounts and carefully review your balance sheets. You should also compare your cash flow statements and profit and loss totals to both last year’s numbers as well as the year before.
This way, you can get a good idea about where you stand, and how much things have potentially improved since this time last year.
It’s important to highlight the differences that could be affecting your profit and loss – last year, for example, your staff might have been furloughed, but now the furlough scheme has ended, you may need to cut back in other ways in order to get ready for the coming year.
By having a clear picture of your current financial situation, you can put a plan together for 2022 and beyond.
2. Build a plan for the coming year
Now you know where you stand, it’s time to put together a business plan for 2022. Look closely at your business strengths and weaknesses and identify any areas for potential change so that you can put together a plan.
What is your basic operating budget? The minimum finance you need? Where could you cut costs? Answer these questions and review your strategies accordingly.
If you need any extra help, business turnaround specialists including licensed insolvency practitioners will be able to help you look at every aspect of your business and put together a thorough plan.
3. Create a cash flow forecast
So, you’ve looked at what happened last year and have put together a plan for the coming year. Next up, then, it’s time to create a cash flow forecast for 2022.
Make sure you’re as realistic as possible – it’s about preventing shortfalls rather than putting impressive and unachievable numbers down to impress.
Your cash flow forecast should enable you to estimate the amount of money you expect to come in and out of your business and when, so you know in advance how much cash you will need in the coming months.
Planning ahead means that you can make the necessary precautions to make sure you’re prepared for any tricky times ahead – so it’s definitely a task worth doing!
4. Boost your cash flow
Forecast complete, now it’s time to see if there are any ways you could bring in some more funds. Positive cash flow is absolutely key to rebuilding your business, especially in a time that is fraught with economic uncertainty.
Start by auditing your stock to see if you can free any up to bring in more funds, and be sure to cut as many costs as possible. Question each expense and liaise with suppliers where possible to negotiate better deals for the coming year.
You should also set up a daily cash flow control if you haven’t already to keep track of all expenses so you can stay in complete control. Basically, you need to be as stringent as possible when it comes to managing your cash flow – after all, every little helps!
5. Think about additional finance
Even with thorough forecasting and stringent cash flow control, you might still find that you require some extra finance to get your business back to pre-pandemic levels.
One potential option is invoice factoring and invoice discounting. This can help to provide a regular cash injection each month by lending money against the amounts raised on your invoices, whilst alternative options include asset-based funding, peer-to-peer funding and crowdfunding.
For further ideas, don’t miss our blog on the different finance options available.
6. Talk to the experts
For further help and advice to ensure your business thrives in 2022, reach out to business turnaround specialists.
At McAlister & Co, there’s nothing we don’t know about business rescue and recovery, and we can advise on a number of bespoke solutions to turn around your business and help you prepare for 2022.
It’s important to be proactive when it comes to your business finances.
So, the sooner you take action, the better. For clear, strategic advice from our friendly and knowledgeable team, contact McAlister & Co today.
