Champion Round-Up | By Ged Cosgrove, group managing partner
We’ve entered a new year with a renewed sense of determination, and our teams are primed and ready with a toolbox of expertise, strategy, analysis and speed to support clients through a period that promises to test us.
And rightly so when the latest insolvency figures make for grim reading. December 2022 saw 1,964 company insolvencies in the UK. That’s 32% higher than December 2021 – when some COVID-19 support measures were still in place, buoying many businesses – and 76% higher than December 2019, before the pandemic.
There were also more than three and a half times as many company liquidations in December 2022 than in December 2021 – 8% more than in December 2019.
The figures are clear. It’s hard to be in business right now.
But rest assured, there are proactive steps to take, regardless of how strong you or your business’s financial health may be.
Cash is critical. Businesses must keep a close eye on cash flow projections and forecast effectively. Dealing with late payers can be the difference between surviving or not, so you may need to rethink your payment terms. Now may also be the time to raise your prices, in line with the increased costs that your business is no doubt incurring. These conversations with clients and suppliers are all too easy to shy away from, but during this time of incredibly high inflation, many businesses cannot afford double-digit interest rates on business loans and alternative finance.
It’s also important to be aware of issues that may impact your business. With a war in Ukraine, Brexit and ministerial changes affecting multiple sectors, from rising mortgage interest rates for private landlords, increases to the cost of materials for manufacturers, and rocketing overheads for energy-intensive sectors. Businesses must remain agile, be willing to change and adapt – often at short notice – and focus on their people, as today’s war for talent threatens stability.
However, there is some relief as rumours circulate that the upcoming recession won’t be quite as harsh as originally predicted. The sentiment has been touted by both the Bank of England chief and the IMF, who cautiously suggest that growth prospects have picked up.
What is important is that you act. Now is not the moment to shy away from decisions or bury your head in the sand. With good advice and a willingness to adapt, your business can both survive and thrive.