There has been increased press speculation over the last few days suggesting that the UK economy (Scotland’s in particular) is now in recovery mode. As a result growth can be expected for the rest of the year and more positive than this, the rate of growth is expected to increase in 2014 and again in 2015. Putting aside any natural cynicism (we are accountants after all!) to one side and let’s accept that this is the case. How ready are businesses in the UK for growth? How ready is your business for growth?
The 80’s and 90’s recessions have shown that the peak of insolvencies and financial difficulties happen after the recession has gone and a recovery phase has set in. The reasons for this are multiple. The requirement for working capital increases as a business expands, often quickly. The banks are, perhaps, still not best placed to assist as much as required. Suppliers and landlords may have been supportive during leaner times but businesses find that these terms harden up again when recovery comes.
The skills required in managing a growing business are quite different to merely trying to survive. During a prolonged recession, like we have been experiencing, there probably hasn’t been many new staff employed, training of existing staff may have been neglected and getting back up to speed to operate efficiently at an increased pace may be a challenge.
Thankfully there is much that can be done to avoid falling into difficulty. If you see better times around the corner then now is the time to plan for this. Preparing a robust plan with financial projections is a good start. When you have a better idea of where you are going then you can plan accordingly. Things like reviewing your terms of business, staffing requirements, capacity, and working capital requirement are all good practice. Now may also be a good time to review your accounting systems to ensure that they are robust enough to help you manage a successful growing business.
We can assist you with all of the above (and much more!) and would be more than happy to discuss any aspect of this to ensure that your business is performing to its full potential.