How to build a resilient business in 2023/24
Despite a small growth in the economy in January of 0.3%, the UK has been struggling under the weight of high inflation and rising borrowing costs.
Most economists are predicting a contraction in the economy in the next six months. The British Chambers of Commerce forecast that inflation has peaked at 11% and will slow to 5% by the end of 2023.
Conditions are likely to remain challenging for businesses and individuals alike, so now is a good time to focus on resilience.
Tips for business resilience
There is no magic wand to wave, but experience has taught us that there are actions you can consider for your business, to make it more resilient in the economy we are trading in.
Here are a few actions you can take for your business:
- Review your budgets and set realistic and achievable targets for 2023/24.
- Be careful with ‘can’t pay’ customers and get rid of ‘won’t pay’ customers.
- Review your debtors list and chase up overdue invoices (if appropriate).
- Offer existing debtors extended payment terms and/or discounts (if applicable).
- Make sure your Terms of Business contain explicit payment terms.
- Assign responsibility to one individual for invoicing and collections.
- Agree extended payment terms with all suppliers in advance (if applicable).
- If appropriate, review banking facilities and discuss future needs.
- Put extra effort into making sure your relationships with your better customers are solid.
- Review and flow-chart the main processes in your business (e.g. sales processing, order fulfilment, shipping etc) and challenge the need for each step.
- Encourage team members to suggest ways to streamline and simplify processes (e.g. sit down and brainstorm about efficiencies and cost reduction).
- Review your staffing needs over the next few months.
- Review your list of products and services and eliminate those that are unprofitable or not core products/services.
Key performance indicators (KPIs)
It’s important to establish and measure KPIs on a regular basis. Some examples include:
- Sales leads generated
- Orders supplied/fulfilled
- Cash balance
- Stock turnover
- Debtor days
- Gross profit
- Net profit
If you would like further tips for business resilience, get in touch with one of our Business Services team on 01903 234094.