1. Get the business basics right
Sometimes you can be so busy with the day-to-day work of your business that you take your eye off the fundamentals. The problem with that is that during challenging times, businesses built on shaky foundations can be unstable. The start of a new year is a good time to look at your businesses’ processes and contracts to spot any areas that may need a review and refresh. For example, if you have business partners or fellow shareholders then make sure your agreements are still fit for purpose – remembering that circumstances and priorities may have moved on since they were drawn up. These agreements should clearly set out how you intend to manage your business and be flexible enough to move when the economy changes. This way, you will be better placed to overcome issues that can be distracting and lead to emotional stress for you, and uncertainty for your business and its people.
Key resolution: Review your shareholder and partnership agreements to make sure they are fit for purpose for the year ahead.
2. Keep a close eye on your cash flow
Cash flow is the lifeblood of your business, and we know from previous periods of financial insecurity that those who plan well weather the storm better. Talk to banks and funders so there are options if there is a future need for support. Examine forecasts and debt regularly and review your credit control processes. Small changes like sending polite reminders before due dates can help keep funds flowing. Move quickly over late, large or critical debts – don’t put your head in the sand. Legal action is an option but having an eye on your customers’ financial health and keeping the lines of communication open can help get the cash to you more quickly.
Key resolution: Review your debt recovery processes with a specialist such as the Thrings Debt Recovery lawyers to ensure you have robust processes to deal with problems such as late payment.
3. Focus on your people
It is likely that recruitment and retention will be a key challenge for businesses of all sizes during 2023. The rising cost of living will push up wages, Brexit means candidates are fewer and further between in many industries and sectors, and economic pressures can put extra strain on employees, affecting their wellbeing and productivity. Some businesses may also find themselves having to take difficult decisions around restructuring and redundancy. Employment law can be complex and dealing with change can be stressful, especially if you are unprepared. Taking advice from an employment specialist now and talking through potential pitfalls could put you in a better position to take on challenges later.
Key resolution: Ensure your staff policies, contracts, handbooks and recruitment processes are up to date, and think about how prepared you are if you need to make difficult decisions during 2023.
4. Review your contracts
Robust contracts drawn up for the specific needs of your business are crucial, especially when economic pressures may lead to you having to increase prices. For supplier contracts, ensure you have clear pricing, and that any price increase provisions are reflected in your customer contracts wherever possible, or can only be enforced with your agreement. For customer contracts ensure that you have the option to terminate a contract if your customer’s financial health looks like it might be struggling, before they enter into a formal insolvency event.
Key resolution: Work with a contracts specialist to make sure your business is protected if you or a supplier changes terms or increases prices.
5. Be bold but minimise risk
A pressured economic environment can be an opportunity as well as a challenge – for example, good acquisition opportunities may become available, and there may be the chance to step into a competitor’s place if they are struggling. For some businesses being proactive, rather than waiting it out, can be the difference between surviving and thriving in the year ahead. However, there is a difference between being bold and taking unnecessary risks – so it’s important to take advice from specialists to minimise risk wherever possible if you are thinking of making a significant investment such as an acquisition. Sadly, some business will fail – and if you are concerned about yours then the earlier you can act, the better. With help from a trusted legal advisor, you can greatly increase the chance of a less devastating outcome even in the worst case scenario.
Key resolution: Look for opportunities to grow your business, but always seek advice before taking significant decisions.
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Thrings Business Growth Lawyers helps businesses thrive by providing practical business advice from commercial specialists.
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