Entrepreneurs Advised to Protect Their ££s and Plan for Business Growth

With the Office for National Statistics revealing that the UK economy has rocketed past its pre-recession peak, and organisations across the country reporting a boost in business, an expert business consultant is advising entrepreneurs not to be lulled into a false sense of security.

Alan S Adams, Director of Shropshire-based Horizons Consultants, is warning Shrewsbury business owners that even when sales soar – particularly after a recession – business growth can in fact cause serious cash flow challenges and in some cases, even lead to a company folding.

“For many businesses growth is the barometer of success, but expansion after a recession can actually present a series of cash flow obstacles, and in order to grow successfully you need to be prepared,” explained Alan.

“It pays to have an expansion plan in place which incorporates contingency financing. Think about how you will financially manage the increased demand in your products or services, and where the additional capital will come from – whether that’s company profits, personal investment or even a loan.”

As businesses grow coming out of recession, overtrading sets in and in many cases this puts serious strain on financial and operational systems and controls manned by depleted teams.

“Remember, cash is king when it comes to the financial management of a growing company, and even if your overall revenue increases, you may be no better off if your profit margins shrink,” continued Alan. “In this situation, don’t count on huge price hikes to cover the balance, or you’re almost certain to lose customers.

“I’d strongly encourage business owners experiencing a post-recession period of growth to liaise with a qualified accountant or a business consultant about their financing options and get a plan in place sooner rather than later,” he concluded.

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Pete White Pete White

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