By Claire West
Coming out of a recession is a financially risky time for many small-to-medium-size businesses (SME’s); according to UKBA (UK Business Advisors) who are currently helping many companies struggling with finances.
Signs of the end of the recession can actually increase company financial pressures. Orders can increase, but often in lower quantities (for the same sale price) with shorter lead times demanded. Supply chains have often emptied out producing shortages.
Companies may need to increase people and other resources having cut back during the downturn. All of these are likely to increase costs, and just as importantly, negatively affect cash flow.
Compounding the problems is tighter credit from the banks and suppliers demanding quicker payments.
They key advice from UKBA is not to ignore the situation, and if necessary get external specialist advice. Consider all the options before committing more of your own cash or borrowings. Borrow and use other people’s money when possible, but do it wisely. Look inside your own business for resources. And ultimately if it really is game over, don’t despair, get help, deal with it, and get on with your life.
Ralph Myers, a financial specialist within UKBA advises, “Historically, coming out of recession is very difficult for companies. Recognising the situation and planning a way through, is one of the key factors that divides those that make it successfully to a brighter future and those that don’t. Do ask for expert help, it will cost a little, but can make all the difference”.