From a financial perspective is your business neither alive nor dead? Are you able to cover your overheads but never able to build up profit or any substantial cash reserves?
After the last 18 months many business owners have seen a roller coaster of ups, and so much continued uncertainty has meant that many have not been able to get back to improving and growing their business.
The think tank, Onward suggests that zombie business may have increased by up to 4% in 2021, bringing the total number of UK businesses in this situation to over 20%. This feels even more unfair when you consider that many newly indebted businesses would have been viable and profit-making before the pandemic.
It is expected by several economy experts that as the requirement of bounce back loan repayments kick in, more and more businesses will be left in a ‘zombified’ state: barely able to cover their debts and unable to invest in growth for their future.
Doing nothing is not the answer…..
Since the pandemic many business owners took the decision to hold back and wait and when the number of financial support options came along it helped to justify this approach. Whilst barely surviving became the norm and an overly cautioned approach seemed logical, too much reliance was put on the ‘we are all in the same boat’ and a simple hope of it working out. Now too many business owners are left without a way to get on top of their debts and grow their business. With years of hard work in front of them many are understandably thinking of killing off their business for good.
As nightmarish as this situation is for many business owners, I recommend that all business owners sit down now with their accountants, financial advisers and business planners or consultants and look at the viable options, and I mean all of them, the good the bad, and even the unthinkable.
Make sure that you think about what the new budget announcements will mean for your business and make a real plan for every scenario, including growth, consolidation, mergers, diversifying and even insolvency. Specialists in this field will be able to help you plan properly and look at all opportunities in order that you can stop coasting and start getting your head round how to get back to a more productive place. Don’t be scared into making the wrong decision!
