With doom and gloom predictions in the press daily, you may be starting to feel a little concerned about what 2020 has in store for your small business. We don’t know what impact Brexit or a Christmas general election will have on the small end of the business community. What we do know, however, is that now is not the time to panic and make hasty decisions that could have a damaging effect in the long term.
What about the self-employed builder, for instance, who sells his equipment to raise some cash only to discover that he must turn down a new contract because he doesn’t have the right tools? Or the plumber who switches to a cheaper supplier, but quickly finds he is unable to get the tools and materials he needs for a specialist job so ends up losing a valuable contract.
Instead of allowing yourself to be panicked into making ill-fated business decisions, the best thing you can do for your business when the outlook is uncertain is slow down. Take the time to look closely at the company finances to understand how best to future-proof your business.
First, you will need to have a clear view of the company books to understand what money is flowing in and out of the commercial account. As well as looking at overhead costs such as rent, people and suppliers, to get a true overview you will need to know your customers and where your profit is coming from. You may also want to revisit your original business plan to remind yourself of the initial aims you had for the business.
If you are concerned about how a recession might impact your business, find the time to make contingency plans for the worst-case scenario so you are better placed to make the right changes should the need arise. Consider, for instance, the long-term effect of switching suppliers, or whether you may need to make redundancies.
Too often small business owners come to Ozlop for help getting their books into shape after something has gone drastically wrong.
The common story is that they have become too absorbed in getting the business going and haven’t kept the books up to date because they didn’t have the time. They haven’t planned for a downturn – or an upturn for that matter! And they don’t know how to make spending decisions that will benefit the business.
Rather than waiting for trouble to arise, at Ozlop we encourage customers to have regular oversight of their books so they can make informed business decisions. When the economic outlook is uncertain, planning for all eventualities is easier when you know your business figures.
Of course, finding the time to process receipts and invoices and do the sums is not always easy. Ozlop can help relieve the pressure by doing the work for you. Simply send us your stuff – bills, sales, expenses etc – and we’ll process them for you. You’ll get the books at the same time every month so you can make decisions based on real figures – not those conflated in your head.
If you are feeling worried about what 2020 has in store, get in touch to discuss how Ozlop can help you prepare for the year ahead.
David Vine – small business specialist and Managing Director at Ozlop, the bookkeeping specialists for owner-managed businesses