Whilst most companies tend to think of their finances in terms of quarters and conduct business according to the tax year, there’s still something about a new calendar year that brings with it renewed enthusiasm, a fresh perspective and a desire to start achieving more.
We might be well into 2022 now, but with so many businesses reporting substantial financial suffering in 2021, it’s still worth taking a quick look in the rear-view mirror to see if there are any lessons that can be learned in order to better your performance in 2022…
Looking back on last year
Of course, thanks to the COVID-19 pandemic and Brexit, among other issues, the last two years haven’t been easy for UK business.
A report on financial suffering in UK business showed that more than 720,000 companies suffered from serious financial problems, with UK companies in financial distress rising at the fastest pace in seven years.
In fact, it is thought that the COVID-19 pandemic alone will cost small businesses a staggering £12.6 billion.
So, what’s going on?
What are the reasons behind such a rise in financial suffering, then?
Of course, each case is different, but there are a number of factors affecting the financial stability of UK businesses, including:
- the aftermath of the pandemic
- the repayment of government loans
- the end of the furlough scheme
- wage increases
- National Insurance increases
- the rise in the cost of materials, and
- the return to pre-pandemic VAT levels for the hospitality and tourism sectors.
It’s no wonder that so many businesses are struggling! But what can be done? Rest assured that, despite the doom and gloom that we’ve been living with for the past two years, there are still solutions available that can help you to avert disaster and turn your business around.
How to future-proof your finances for the rest of 2022
If you’re concerned about your financial stability and are worried about how your business is going to make it through 2022 and beyond, you’re not alone. However, help is at hand - so read on to discover five ways you can future-proof your business:
1. Go over your figures again
Before you begin to panic, you need to know exactly what it is you’re panicking over. Go back over your accounts and make sure things are as accurate as possible.
By knowing exactly what you’re dealing with, you’ll be in a better position to deal with what’s ahead, create a cash flow forecast, and plan for the coming months.
2. Review your cost management
The first step you can take towards future-proofing your finances is battening down the hatches so you can reduce your overheads as much as possible without affecting your output.
Sure, this sounds easier said than done, but try speaking to your suppliers to see if you can get a better deal and negotiate with your creditors to figure out affordable payment plans. Discover some excellent ways to cut costs in this blog.
3. Stay ahead of the competition
Yes, this is a pretty standard business concept. But if you can get ahead of your rivals, it could be the difference needed to steer your business towards a more profitable year.
Perhaps you could branch out or even just focus on one product or service, or why not trial an interesting but cost-effective marketing campaign? There are lots of ways to set yourself apart!
4. Financing options
Another option if you believe things could be turned around with an injection of cash is to borrow money.
From invoice financing and asset finance to grants and even crowdfunding, there are a number of finance options available. We investigate some of the solutions you could explore here.
5. Seek expert advice
For more help and advice and to ensure your business thrives in 2022, it makes sense to reach out to the experts. At McAlister & Co, there’s nothing we don’t know about business rescue and recovery, and we can advise on a number of specialist solutions to help you get through 2022.
Need further advice?
We really hope that 2022 sees the number of businesses facing financial difficulty drop. However, if you can’t see a way out of your position and are worrying about your next steps, contact McAlister & Co today.
From financing options to cash flow control, give us a call today on 03338 802 576 and start to rewrite your story in 2022.