Can your business survive a recession?

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Can your business survive a recession?

Some help

Some of us have been in business for very many years and have survived and even thrived during recessions. However, although we can learn from history every recession is different. For the first time in many years, we have rapidly rising inflation and rising interest rates. Although some of this may be due to war and global warming, neither are likely to be resolved quickly. The resultant fuel crisis and world food shortages are likely to continue for some time. The inflationary consequences will have a significant impact on all businesses.

The likely effects a) A drop in real income.b) An increase in expenses.c) Tensions within the business both betweenmembers of management and managementand staff.

What should be done

1. Make sure that you have sound and sensibleexperienced advisors.

2. Make sure that you are aware of yourbusiness income and expenses and havesuitable projections and keep them measuredand updated.

3. Make sure that you have suitabledocumented agreements and policies inplace both for internal purposes betweenmanagement and with staff and also forexternal financial purposes. Significantorganisations from which you may seekassistance such as the Government, Banks,and other financiers like documentation sothat they may tick their boxes. You need themfor your own protection.

4. Do not panic. Be confident in your own business.

5. Continue to market. Income is everything.

6. If necessary, look to cut expenses but avoidcutting expenses that will hinder your income,service, or reputation, if possible.

7. Be open about your own position with thosewho it may affect, such as your landlord,bank, and staff. Individuals and institutions donot like surprises. They are more likely to besympathetic if you are open with them. Yourprofessional advisors may help you with this.

8. Be aware that he vast majority of legalassistance provided by changes in the lawduring the coronavirus pandemic no longerexist. There is no moratorium on statutorydemands and insolvency. Such rental schemesas there are or remain are complex and notapplicable to all occupancies. Governmenthelp with fuel bills for business said to starton 1st October 2022 currently only has a sixmonthtime horizon.

Solution

1. Make sure that you are aware of your ownfinancial and legal position and have the correctdocumentation in place for your business.

2. Check that your advisors are suitably experienced and are willing to help you and on what terms.

3. Do not be afraid to ask for help. Talking to a professional advisor with suitable experience and knowhow is always of assistance.

4. Do not leave it until it is too late to seek help. Plan, prepare and anticipate.

©Nicholas Woolf Swanturton 26th September 2022

This article comprises the view of the author as at 26th September 2022. This note is not a substitute for legal advice or other expert advice. Information may be incorrect or out of date and may not constitute a definitive or complete statement of the law or the legal market in any area. This note is not intended to constitute advice in any specific situation. You should take legal advice in specific situations. All implied warranties and conditions are excluded, to the maximum extent permitted by law.

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