Right now, the UK is in a financial squeeze.
You’ve only just come out of the most intense trading conditions during peak COVID and now this. It can feel like one body shot after another.
Faced with rising costs for your business , larger bills at home, rising inflation in the shops, and international strife, it could be a hard year ahead.
Time to curl up and sleep?
We’ve seen it time and time again. Business owners during tough trading times can be tempted to act like a hibernating hedgehog.
Curl up, slow everything down and prepare to weather the storm.
Hedgehog-style business owners also make drastic changes to reduce activity. They:
- Cut as much expenditure as possible
- Cancel their marketing plans, growth, and investment
- Ditch anything deemed non-essential
The problem with this hedgehog defence strategy is that in our experience, it just doesn’t work.
If you’ve ever tried to cut your household bills, there is only so much you can cut before you can’t live (let alone enjoy yourself!).
It’s the same with your business; there are some general operating expenses you just can’t cut.
Don’t cut your marketing
Panic-cutting things like marketing can be counter-productive. You need to continue to grow and replace customers. All businesses have customer ‘churn’, and successful businesses ensure they replace them with new ones through marketing strategies.
To stop proactively doing this is asking for big trouble in the longer term. It might feel a good move now without that money going out for a few months, but it won’t be in the medium to long term.
Don’t panic (in large friendly letters**)
There is nothing wrong with stabilising and consolidating your position for a short time, but don’t panic. Don’t stop acting and pushing into the market. Control what you can control, and don’t blame it on ‘Market Conditions’.
So don’t curl up. Plan, take action and get into shape. It’s time to fight, not sleep. There is a tonne of opportunity out there.
You are now like Rocky in the movies. It’s time to train, get your business ripped and be in the best financially solid shape of your life for the next fight.
So where to start?
To get some clarity and confidence, the first step to get started is to put pen to paper (or numbers to spreadsheet). You need to get a feel for what your income, costs, cash and profit might look like.
You can also read more on the subjects of planning here in our blog on the subject.
We have further content coming to help give you some practical ideas of what you can do in your business.
Don’t be prickly – get advice now
Ask your accountant for help running through your numbers.
If you are already a Heelan Associates client, we have services to help with cashflow planning, budgeting and business planning.
If you don’t have an accountant, or feel you ‘re not getting the information and advice you need from your current accountant, we’d love a chat about how we can help. Just:
** See “The Hitchhikers Guide to the Galaxy”