Recent stats have revealed that many new businesses will have failed before five years have passed. Several things can cause failure, but before that even occurs, a business is likely to have experienced some sort of struggle. Is your business experiencing the following signs? If so, there’s help available.
Not Being Online
Over 80% of adults in the UK get online on a daily basis, with almost the same number shopping online. Even so, many businesses still do not have an active online presence. Interestingly, a recent study revealed that more than half of UK residents find it a challenge to support even their local businesses if they don’t have a website.
It’s true that a business can still exist without being online. However, in doing so, a major opportunity to generate the healthy cash flow that will keep your business going may be passing you by. Even locally based service businesses can benefit from the additional exposure that comes from having a website, active social media accounts and a suitable promotional strategy.
Government Policy & Tax Headaches
If you’re experiencing a lot of stress as the result of the implementation of new government policies and tax legislation for businesses, you’re not alone; many business owners feel that the current landscape is more of a hindrance than a help.
On average, approximately 60% of businesses pay an average of £3,000 or more each year just to figure out the ins and outs of taxation for their companies.
Not Being Able To Achieve Balance
Positive cash flow keeps businesses alive. Without it, many problems can arise. In fact, the majority of small business failures occur because of poor cash flow. All too often, a business’s expenses continuously outweigh its income.
Where cash flow is concerned, late-paying clients are no help. These days, it’s common for a business to wait as many as two months or more for payment from clients, with the average wait for payment being 70+ days.
Another element of imbalance can be over-optimistic spending, which should be, but often isn’t, addressed by some means of sound financial planning. Couple that with long wait times for payment, and it’s easy to see where and why failure can occur, and often at a very rapid pace.
Solutions To Staying Afloat
Being a small business struggling to survive means being resourceful. There are actually many ways to solve those current problems that can turn into future failure.
You can take stock of what kind of support exists around you. For example, you may be able to take advantage of a number of government initiatives that help struggling businesses. Another way to help yourself is to look at your market and read up on predictions for your industry. Making this a habit will help you to remain competitive, as well as keeping your reflexes keen should you need to be able to quickly adapt in response to changes in the market.
Another way to stop struggling is to seek the advice of a business insolvency specialist, such as BCR. Contrary to popular belief, insolvency practitioners don’t march straight in to close a business; we can help you identify where you may be struggling most, as well as provide you with a set of processes you can implement to get your cash flow where it needs to be, reach more customers and make sense of tax legislation.
You may have only seen one or two signs of distress in your business, and may have decided to remain optimistic about the future. However, while optimism never goes out of style, it’s also important to be vigilant; the smallest problem can become worse over a very short period of time if left unchecked.