Winter is Coming!Posted: Oct 12, 2021

Yes, for those of you that watched ‘Game of Thrones’ you will appreciate that this is the threat of bad things happening. We have heard similar phrases being used in the press, such as ‘Winter of discontent, ‘Shortages’ and stories of empty shelves.

The reasons for this are obvious.

1)     Fuel prices have increased dramatically, which eventually filter through to higher bills in everything we buy.

2)     Inflation seems to be a growing threat, again having an impact on everyone. Of more concern is growing talk of an increase in interest rates, potentially, before the end of the year.

3)     Furlough has now come to an end and universal credit has been reduced.

4)     Ongoing stories about shortages in many sectors are becoming clear.

5)     HMRC are back to their normal debt collection processes.

6)     As mentioned in a previous blog, the Courts can now progress winding-up orders with various restrictions being phased out.

My personal fear is that all the above will have a negative effect on the economy which has only just come out of the wilderness of the pandemic and the various lockdowns.

If the above is correct what should business owners do moving forward. Here are some thoughts.

First, as it has always been, CASH IS KING. Therefore, produce a cash flow forecast, review it, and know when the pinch points are (rent payment, VAT quarters etc) and plan for them.

Second, do you know what your break-even turnover is? How much do you need to invoice to cover your costs? At least by knowing this you can work out if you are having a good or a bad month.

Third, given the potential for shortages, maybe now is the time that you look at your business, which supplier or product is key to your business. What would you do if they could no longer supply what you need and what can you do to change that?

Finally, what is the position in respect of your customers? If we do have a bleak winter, how will it affect them and what is the impact on you. What can you do to change that?

If your business is going through a rough time and you think you could be facing insolvency, then talk to us. The first consultation is free and whether it results in comforting reassurance, a rescue plan, or an insolvency process, the sooner we start, the better your result will be. We hope it can provide you with a ‘roadmap’ to the future.