We seem to be facing at least two years of economic challenges. Inflation, recession, rising interest rates and general cost of living (energy) increases.
And let’s not forget the more imminent hose pipe bans.
Our government is in limbo, electing a new leader, and an emergency budget is promised for September, when the new cabinet is in place.
Meanwhile, business owners need to find some way to weather this hiatus and come out the other side with some measure of retained profits and working cash flow.
Business owners will need to keep a weather eye on their balance sheet. In particular:
- Converting sales into cash in the bank as quickly as they can. This may involve rethinking credit control systems.
- Reducing other working capital needs, for example, by monitoring and reducing redundant or unnecessary stock levels.
- Reconsidering investment decisions.
Every business sector will have its challenges in the short-term. With downward pressure on business profitability and upward pressure on personal cost of living expenses, we are facing an uncomfortable period.