Date posted:
Mon 18 January 2021
Blue Monday, when it was first established in 2005, pinpointed the third Monday in January as the “most depressing” of the year, after analysing a number of key factors. These included weather conditions, time elapsed since Christmas and time since failing our new year’s resolutions.
While the formula behind the awareness day has been questioned over time, there’s no doubt that we all suffer a bout of the blues as we leave behind the festive season. Business leaders in particular come back to tax and VAT deadlines and other finance considerations that may have been put on the backburner during the break.
This year, with uncertainty still abound due to the ongoing pandemic and deadlines for deferred payments creeping up, the stress levels and pressure points for business owners are likely to be even more acute. To help alleviate that pressure, Professional Liverpool members, four of the Bathgate Business Finance team have shared their financial ‘spring cleaning’ tips for business owners across the region.
Planning is pivotal
“Future planning is a must,” says cash flow specialist, Chris McLoughlin. “If you don’t plan for the future you will be left behind, looking at recent challenges and watching businesses who took the time plan thrive.”
Diversify and give new ideas a chance
From effective planning, new ideas can often spring and in a time of rapid change and constant flex, innovation has never been more important. Chris continues: “Don’t discount an idea, because ideas can turn into profits. No idea is a bad idea, they can always be refined and that idea could then be the one to move a business forward and prosper.”
Property finance expert, Ben Humphreys, adds: “It’s important to look at what options there are to diversify your revenue, for example by the product you offer or perhaps the source of new clients. Not only can this increase revenue but more importantly it can also develop resilience against factors out of your control.”
Step out of the business
One effective way to generate new ideas, identify diversification opportunities and also assess your position, is to step outside of the business and take an overview. Ben says: “The start of the year is a great time to step out of the business and do a review of where your business is and where you want it to be. Decisions around the business are
a lot easier to make when you have a full view of what is happening, alongside a solid plan. It also often leads to a lot of cost cutting opportunities and a chance to re-engage with staff when you communicate the company’s vision.”
Get organised.
VAT Finance specialist, Paul Trickett, adds: “Good financial housekeeping is also an excellent way of avoiding future stresses. Making sure you pay your bills on time to avoid late payments, defaults and CCJs, will ensure you keep a good credit report.”
Although personal responsibility is important, Paul also highlights that good financial organisation in a business isn’t a solo task. “When it comes to setting yourself up in a way that is conducive to securing business finance,” he says. “A joined up approach between accountant, business owner and financier is key. Ideally the three should work together to implement effective cash flow planning that is continually flexed and updated in line with changes in the business landscape and customer habits. It is businesses that are up-to-date, coordinated and prepared who will present the best case to lenders.”
Be open minded to types of finance
With much change in the market since the start of the pandemic, lenders’ criteria have changed or become far more rigid, meaning that the usual funding avenues may not be open to some businesses. Working capital expert, Ian Adams, says: “People need to be open-minded to the types of finance they access. There are a number of finance options available as opposed to just a loan. In many cases, with debt service likely to be a key issue, alternative revolving facilities will be required and it will take knowledgeable financiers with a wide network of brokers to find the right fit for your company.”
If you need financial advice for your business, email info@bathgatebf.co.uk, visit the Bathgate Business Finance website or call 0151 625 7323.