Biz Tips: How to Survive and Thrive in Business

Biz Tips: How to Survive and Thrive in Business

Biz Tip:

How to Survive and Thrive in Business

Business is very rarely, if ever at all, a smooth-sailing venture. More often than not, a company will run into economic difficulty despite the precautions and experience of the directors. Financial fluctuations are part and parcel throughout the life of a business, so what separates the survivors from the sinkers?

INVEST IN PEOPLE AND TRAINING

Tackling any potential skills gap issues within your company is a sound investment to make when it comes to preserving its future. Are your employees up to date with relevant software and applications? This kind of forethought enables the streamlining of processes and encourages time efficiency.

But there are more benefits to staff training than just conduciveness. It shows employees that you see the value in them, proving that you’re setting them up to be a part of the company’s future, leading to a sense of job satisfaction and increased productivity. This, in turn, can help to futureproof the entity from a sudden shortage in key roles due to employees looking – and finding – elsewhere.

The job market is full of talent, but it is also saturated with competition – and not just on the part of those looking for work. To thrive, a company needs headstrong leaders, a team with initiative, and individuals who actively collaborate on your vision for the future. With this in mind, you’re not going to be the only business plundering the talent pool – staff training and progression packages can help stand you apart from the rest.

CONSIDER CASHFLOW

One thing which many companies fall foul of is not taking advantage of the financial help on offer in the form of invoice financing, and other arrangements alike. Most companies will encounter financial distress at some point, no matter how cautious directors try to be. The top three economic pitfalls for companies are:

  • Lack of sales to cover costs/produce a margin.
  • An unexpected debt.
  • Unpaid ledger debt.

When circumstances like this hinder the progress of a company, it can be hard to see how best to move forward, if at all. However, if the business model works and is proving profitable (i.e. the sales are coming in), then there’s help on offer to you before you start considering more permanent measures, such as liquidation. Because life sometimes throws unanticipated, and potentially problematic, things our way – a broken printer, a malfunctioning crane, maybe – there are safety nets to fall back on when the company doesn’t quite have the cash to cushion the blow. Asset finance will let a business spread the cost of new equipment over a period of time, meaning you won’t have to find large chunks of money to replace items.

Aside from the impact of crucial machinery and so on breaking down, a B2B commercial entity can also be burdened by unpaid invoices. Having money tied up in ledger debt restricts your cash flow and means you’re always waiting for money to drip back in, often hampering your buying power and growth. Setting up a factoring facility can grant you access to funds you would otherwise have to wait an indefinite amount of time for, thus bringing liquidity back into the business.

CUT YOUR LOSSES

When your company thrives in one area but lacks in another, it can be difficult to decide to restructure. However, even if on the whole the business is doing well, the entrepreneurs among you should consider – could it be doing better? Cutting your losses is a sensible way to protect your business from future deficits.

A Members Voluntary Liquidation (MVL) can be used to fulfil this exact purpose, specifically an MVL Section 10. This process is typically referred to as ‘solvent restructuring’, a phrase which can be applied to a ‘demerger’ or a ‘partition.’ It allows certain parts of a business to be liquidated, with shareholders receiving their proportionate shares in one or more remaining companies. How the shares are split will decide if a demerger or partition is enforced.

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