The Companies House submission deadline’s approaching
Back in March 2020, the Government announced that Companies could... ...
21 March 2020
It seems that most business owners have the majority of their finances invested in or pledged in support of their company.
Whilst showing admirable commitment to their business, this is one indicator of high risk.
Associated risks could be loss of reputation and impact on the team, family, goals, motivation and growth, availability of credit and finances.
Other risk areas a businesses owner might consider:
This can leave you vulnerable to price hikes or a loss of supply if the supplier, leaves the market, has production problems, or finds a new market to supply. Supplier power can control pricing and terms of trade of your purchases.
The loss of one customer can drastically affect the income stream of the business. Buyer power can reduce your control of pricing and terms of trade of your sales. This could be disastrous if you lost that important customer.
There is a risk of competitors under-cutting you, copy-cat products, technology-amended products or removing the relevance/need for your product or service.
This could be a partner, shareholder or major player in your team. Do they hold key skills, contacts or other information? Consider what would happen if this person was suddenly taken ill, left the business, or went to a competitor?
Do you source products from overseas? Consider potential impact (particularly with Brexit) of trade/settlement dates and exchange rates. Is there anything you could do to introduce certainty and minimise the potential impact of fluctuating exchange rates?
Affects 1 in 4 small businesses each year. In 2016, fraud losses to SMEs were estimated at £18.9 billion and on average cyber crime costs each small business victim £3k. Do you have necessary defences in place to counteract this growing threat?
We all know that cash is king and the lifeblood of every business but consider if you have the right structure in place and if there is room for growth. Is your bank supportive of your growth plans and do you regularly monitor performance? Do you have a good relationship with your accountant?
Have you lost track of why you are doing it all? Remember your goals – financial/lifestyle/future. It’s hard work. It’s estimated that 73% of small business owners don’t usually take more than one consecutive week off and most work weekends – is this what you planned when you started in business?
In the day-to-day running of the business, it’s easy for business owners to lose sight of their initial goals and ambitions. Remember why you started out in business in the first place and share your plans and aspirations with your team, bank manager, accountant and trusted advisors so they can help you stay on track to meet those growth objectives.
The good news about risk is that once you have identified it as having the potential to impact your business there are things you can do to minimise or mitigate it. Try and anticipate any potential risks and prepare a plan to mitigate these risks.
Talking to your trusted advisors will provide a wider perspective and should also provide signposts to potential solutions.
Back in March 2020, the Government announced that Companies could... ...
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