My business is struggling - what are the common mistakes I need to avoid?
Against a backdrop of economic uncertainty, many businesses in the UK may be struggling to align their income with their expenditure and hopes that the Bank of the England’s (BoE) £60 billion Funding for Lending Scheme (FLS) would boost the supply of credit to businesses in the UK have recently been dashed.
The latest figures from the BoE reveal that net lending in the quarter to December 31st fell by a figure of £2.4bn compared to the previous quarter. This drop comes despite the fact that participants in the FLS scheme drew down a further £9.5bn in the same period.
If your business is currently experiencing financial difficulties, here are a few common mistakes to avoid when attempting to address the situation:
Take early action
Failing to address your monetary problems at the earliest opportunity could lead to smaller issues snow balling and potentially becoming more difficult to manage. Identifying and seeking solutions to issues as they arise will give you a better chance of keeping track of the performance of your business and allow you access to a greater range of options to remedy the position
Burying your head in the sand
Failing to identify and tackle any problems effectively is likely to have serious consequences. If you are determined to pretend that any problems don’t exist or you are simply relying on some good results in the next quarter to pull you out of trouble, your company is heading for failure.
Failing to get appropriate advice
The recent annual credit check report by ABN AMRO Commercial Finance revealed that more than half (51%) of accountants believe that SMEs do not feel in control of their financial affairs, as a result of a lack of understanding of how to manage their finances. Seek advice.
If your business does encounter financial difficulties, as well as discussing an appropriate course of action internally, speaking to external financial and business rescue advisors could give you the professional guidance needed to bring your business back on track.
If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1143.