The United Kingdom has suffered 13 recessions since 1812. The Global Financial Crisis of the late 2000s saw the UK suffer its worst recession since the war.
Revised GDP data published in December 2013 shows that the ‘double dip’ recession took place between Q4 2011 and Q2 2012. The catalyst for which was the European Sovereign Debt Crisis.
It hasn’t all been doom and gloom for UK business however. Forward thinking businesses are now in a position to capitalise on the myriad of growth opportunities available.
Start-ups defy recession
Although the recession claimed many casualties, particularly amongst big household names; Comet and Blockbuster for example, young start ups have boomed over recent years. Young entrepreneurs have looked to defy the recession, with the Simply Business Start-Up Index showing a 29% rise in the number of firms started by 18-25 year olds since 2008.
For those companies seeing growth, both new and established, there is much more than simply luck at play.
Careful planning plays a huge part in business success, and clear business objectives are something that all successful companies have in common.
Putting a growth plan in place early, with measurable objectives is critical. Post recession growth is not easy, but with a well structured plan, it needn’t be as difficult as first thought.
Of course, business owners do not need to do this alone. Enlisting the support of an experienced finance professional to help crunch the numbers could be a worthwhile investment. This will also reap significant benefits when the subject of funding the growth raises its head.
Your working capital solution must work for you
As production, or activity in a service business, increases, the working capital requirements of the business typically increase too. Cash, after all, is king. In the current environment banks are turning towards more structured forms of finance such as factoring or asset based lending. It’s critical to ensure that you have access to the working capital required to grow as we continue to move out of the recession.
Historically, banks have held the majority, if not all of the cards when it comes to funding the working capital requirements of SMEs. However, the environment is changing, and the rise of alternative funding sources presents business owners with growth aspirations a plethora of options to explore.
With new sources of finance becoming available, and a number of industries seeing significant growth, it could appear on the surface that all is rosy. As with any growth plan however, business owners should tread carefully.
Economic growth following this most recent recession has been anything but quick, and for those business looking to grow at pace as the economy recovers, robust internal controls are critical.
As new opportunities become available, perhaps as a result of space being left in the marketplace by struggling competitors, over-trading can become a very real issue. Putting a well thought out plan in place, considering all of the risks, in addition to the opportunities, could mean the different between thriving post recession, or becoming another of its victims.
If you would like to discuss how to manage your business growth as we come out of recession, or talk about any of the topics covered above, please contact us through the Tectona website or call Mark Nicholls on 07818 407061 or Ronnie Epstein on 07543 275902.