There’s no denying that recent years have posed significant challenges for UK businesses. Both global and national events have had significant and far-reaching repercussions, creating an economic climate increasingly compared to the recession of the late 2000s. While we are not currently in recession, the fact remains that many businesses are struggling in ways which may point towards closure or liquidation being the only viable option. In this blog post, we’ll explore whether this is actually the case or whether a strategic approach can allow for business recovery in the current conditions.
What Are The Biggest Challenges For UK Businesses?
Before we delve into the possibility of business recovery, it’s important that all businesses understand the context which has led us to a challenging economy. The current operating environment is so unprecedented because there is not one sole factor contributing to an overall feeling of uncertainty. The aftermath of Brexit, the COVID-19 pandemic and the ongoing war in Ukraine have all placed collective tension on supply chains and resources, resulting in high inflation, shifting behaviours and growing competition.
An economic climate filled with numerous challenges is very difficult to respond to. On the one hand, businesses will want to plan for the future with confidence and stand out from competitors at a time when consumers are thinking more carefully about their spending. However, it is incredibly hard to be at the forefront of your industry when you are also faced with price rises and cost increases of your own.
Top Tips For Business Recovery In 2024
Given the complexity of the current economic climate, it’s natural to adopt a defeatist mindset if your business is struggling. While there are undoubtedly some circumstances in which closing your business will be the most suitable next step, business recovery is still possible if a multi-faceted approach is adopted. The following strategies provide the most suitable starting points as you contemplate company rescue in 2024:
Embrace Change
One of the easiest ways you can guide your business back to success despite challenging economic conditions is to be open and responsive. While a lot of the recent economic changes have been negative, recent years have also seen some exciting developments for UK businesses. New technology including AI makes it even easier than before to get your business online and keep up with shifting trends, so don’t be afraid to embrace innovation and diversify your offering when posed with challenges.
Prioritise Efficiency
If profit margins are waning, efficiency may be part or all of the problem. Efficiency is key to maintaining profitability but it can quickly slip if you fail to keep an eye on costs and productivity. All business recovery efforts should therefore involve a thorough review of your processes. Consider whether it is possible to switch to cheaper suppliers without jeopardising product or service quality and think about how best resources can be allocated to maximise returns. It may also be beneficial to consider a process of organisational restructuring, either as a precautionary step or as part of a Company Voluntary Arrangement (CVA). This will ensure that your human resources are focused on the areas they are needed most, with opportunities targeted towards the employees and areas of the business able to make the biggest contribution towards success.
Work On Your Cash Flow
Effective cash flow management is crucial for the success of businesses big and small. However, you may neglect to manage cash flow properly and this can land your business in hot waters should you find that you no longer have sufficient cash reserves to meet your short-term obligations. Assessing your cash flow should therefore always form a central part of any business recovery efforts. Start by chasing up late payments and make sure that your invoices are as prompt as they can be. Over time, you will start to notice that you have more of a steady flow of cash and are better equipped to make decisions about the future.
Seek Help
If your business is struggling, it’s also important to remember that you are not in isolation. The economic climate is tough even for competitors and there are a number of places you can look towards if you need advice. You should always seek professional advice if you are concerned about the financial position of your business as this will increase your chances of successful recovery and help you to understand the most appropriate form of company rescue in your circumstances.
For clear and honest business recovery advice, don’t hesitate to get in touch with the experts at Ballard Business Recovery. Our team has years of helping struggling businesses to navigate complex economic circumstances and will work with you to understand the best route forward, whether that be a business recovery plan or a more formal company rescue option.
