How to weather the financial crisis if you own a small business
Times are tough, so here’s our step-by-step guide to beating the fiscal storm
Wednesday 28 September 2022 By Teo van den Broeke
It’s no secret that a vast swathe of the western world is currently enduring one of the worst fiscal storms in recent memory. With the winter fuel crisis looming, global currencies collapsing and international conflicts popping up all over the shop, there’s never been a more important time to become financially literate, particularly if you own a small business.
It’s a point that Jaryd McCormack, senior partner at financial advisory firm Atlantic Swiss, knows only too well. Which is why he’s teamed up with us here at Soho House to provide his ultimate tips for seeing through the winter unscathed.
Nurture a nest egg
Building up a pot of cash right now seems to be king. With rising costs and dramatic changes, having that little bit of spare money could be invaluable – as well as potentially giving you an opportunity to take advantage of something, while competitors may be short on cash.
Pay down debt
As the cost of debt is rising and it will likely rise further, now is a good time to see if you can make a dent in your company debt. Borrowing has been virtually free for a long time and increasing interest rates can bite, especially in companies that have high levels of debt.
Be smart about risk
Don’t overstretch yourself, at least for the short term to see where this economy may go. Don’t avoid risks, but be a little smarter about taking them.
Trim the fat
It’s a good time to look at your business and see where your inefficiencies are, and if there is any unnecessary spending that can be reduced.
Support your staff
If key members of staff are struggling financially, make sure you support them if you can. It’ll go a long way to keeping them happy and loyal.
Check your return on investment
Plan your business spending, looking even more closely at return on investment for each pound spent or borrowed.
Some banks will have better deals than others right now. Organise a discussion with them and talk about the growth of your business.
Restructure your debt payments
If you can’t afford to repay debt, then work with your lender on structuring repayments. Don’t just ignore missed payments. Most banks will work with you and ignoring this will just make the situation worse.