Any good business should have up to date financial information on at least a quarterly basis, preferably monthly. This should help provide up to date information on how the business is doing.  If the first time you get any financial information is 6 months after the end of the financial year, it may be too late to take any remedial actions.

Similarly, a good business should have a rough cash flow forecast for the next 12 months and a detailed one for the next 3 months.

unless your business has a very clear focus on what drives profit in your business, and what specific actions you can take to improve it, then you are almost certainly leaving profit on the table every day.  The vast majority of business we see that are trying to increase profits, are focussed solely on scale.

 

Get bigger. More sales = more profit.

 

In reality this strategy often has exactly the opposite effect!

 

 

 

To continue reading the rest of what we would advise to you please check out our infographic on What any good Business needs. 

 

  • The Business structure you choose is not set in stone, as your business grows, changes or even circumstances change it means you have to alter it, you can change your legal structure to meet the needs.
  • Therefore, you may start as a Partnership but could develop into a Limited Company. You are never stuck under one structure so it’s good practice to find out what structure would best fit your business.

 

 

 

 

SUMMARY

So what are we saying?

The right actions in any economy are to run a profitable and efficient business, and have good financial information to adapt as things change.  This simply becomes more important when we enter a stormy period.

But when times are tough, you need to have one eye on risk and ensure you are protected as far as you can be, should factors outside of your control mean the business is at risk of failure.  That means looking at the business structure and considering whether you should switch to being an LLP, Company or Corporate Group.

If you want to know more about how this is done and whether it is the right thing for you, please get in touch and give us a call.