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Is your business still viable? Time to make some hard decisions

The last 15 months have been unusual for everyone and not least for those who are running a business.

If you are in a business that was severely affected by Covid, you may now just be coming back online or you may have been able to pivot and go in a new direction.

If you are in such a business then there is a good chance that you may have relied on the governments support to get through. This support was a welcome relief for many and made the difference between shutting or not. The support included:

  • The Furlough scheme
  • Easy access to finance
  • Landlords barred from evicting tenants
  • Repayment holidays for many forms of finance

With the decrease in restrictions, the drop in covid cases and the economy coming back online we are seeing a reduction in the support given.

  • Furlough ends in September
  • Evictions may be possible after 30th June
  • Funding is getting harder

So many of the crutches that were there are going, so the big questions are: Can your business survive without the government support? Is your business viable?

The first thing to consider is your cash position – do you have enough cash to get you through the next 6 months.

The best way to know this is to complete a cash forecast for your business where you plot out what cash you are going to have over the coming months, to make sure you are not going to be running out. To help with this, we can provide you with a free template to complete and some training.

If the forecast predicts you are going to run out of cash then you need to do something about it. Have a read of our Cashflow guide here.

The next thing to think about is, do you have the customers you need to be sustainable. That is to say, is there still a market for the product or service that you are offering. Its time to take a long hard look at your market place to see if there is demand for your product or service.

The best way to do this is to do some research into your old customer base and ask a couple of questions i.e. “If we provided this service would you buy it again? What else would you buy?” A little bit of research goes a long way. Opening or re-opening the wrong business will make your life much harder.

Next, consider your own motivation levels for starting again. Your energy and drive are key to your business’s success and if your business has been wiped out by the pandemic and you have to start again, ask yourself – do you have the drive and passion to get back into the fight? You may not have a choice of course, financially you may have to do it. But it could be that now is a good time to get out of the business and try something completely new.

A client once told me that they hated their business! They had run the business for years but they hated it. The pandemic was a blessing in disguise because it allowed them to escape the business they were doing and start a business they loved.

Finally, is the business financially sustainable – It is possible to have reasonable cash reserves but be running at a loss. It could be that the business is financed by loans or debt is building up. Understanding your business’s financial viability is important. Are you carrying too much debt? Do your expenses outweigh your ability to earn income? Are you pricing your product or services too low?

How we can help

We can help assess your financial viability by reviewing up to date numbers. We can help identify your breakeven point and assess if your costs are too high.