UK businesses are navigating a challenging economic environment, impacted by factors such as the ongoing effects of Brexit and interest rates remaining relatively high. With the Chancellor indicating forecast moderate growth of 2% in 2025, financial planning and risk management strategies have never been so vital for businesses in today’s economic climate.
A useful framework might be to start by evaluating the critical three Ps: Planning, Performance and People.
Planning
It is easy to get caught up in addressing immediate and urgent issues, when there have been numerous economic challenges in recent years. By taking the time to set or re-evaluate long-term goals, businesses can better understand the resources required to achieve success.
That is not to say that business owners have a crystal ball and can predict the next global crisis. However, they are in an ideal position to be able to recognise trends and challenges in their own sector, as well as opportunities to move the business forward.
Performance
Implementing effective systems and processes can provide business owners with confidence in their operational matters, allowing them to have oversight without having to be heavily involved. This can also allow for performance monitoring and identifying any variations from the norm, which may need further investigation or remedy.
Company directors are required by law to keep accounting records which disclose the financial position of the company at that time. This duty extends beyond tracking the balance of their bank account; it includes a complete understanding of all the company’s assets and the extent of its liabilities including potential future obligations.
People
Getting the right people in the right roles is essential. As businesses grow and evolve, so must the people. Actively listening to employees, rather than assuming their expectations are being met, can help with hiring and retention. In sectors where the turnover of staff or contractors is common, the creation of a positive working environment can lead to stability within a workplace and avoid the disruption of change.
Overall, in the face of challenges, businesses must be agile and embrace strategic approaches to change. By carefully assessing the current and future economic landscape, businesses will be better equipped to plan and feel prepared for whatever the future may hold.
Partner – Business Recovery Team
To fully understand the challenges being faced in today’s challenging UK economic climate, Menzies commissioned an independent research study with 500 UK CEOs, MDs, COOs and founders. To find out more and to download a copy of the report, please click here.
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