The turbulence of today’s macroeconomic climate is ever present, with a spiralling cost of living crisis and continued inflationary pressures. Businesses are facing a number of challenges – but despite this, there are steps they can take to remain resilient and survive these volatile conditions.
The automotive sector is one of the industries seeing the challenges of the current market conditions. Remembering the Administration of Britishvolt – a lithium battery start-up aimed at innovating electric car batteries to help facilitate the UK’s energy transition – to Ford now announcing plans to execute 1,300 job cuts in the UK in alignment with their new global restructuring agenda – they’ve had to take difficult measures to sustain their businesses.
Similarly, ahead of HSBC’s acquisition of Silicon Valley Bank (“SVB”), its collapse led to alarm bells waving across the UK around the potential perils posed to the stability and operational liquidity of other sectors.
As more and more businesses feel ‘worn out with debt’ in the midst of a post-pandemic economy, there is panic to cost cut in order to try and survive the economic disruption. Whilst the somewhat ‘economic certainty' of the pre-covid past delivered a sense of comfort for companies to develop strategies for long term growth, the need of the hour for businesses now is to be nimble and make quick decisions to survive and thrive in the prevailing uncertainty of the market. The question is, how can this be achieved?
The right answer is the right diligence
Traditionally, businesses reconfigured their business models in-house, with teams spending hours trying to pinpoint areas that could be scaled back to improve cashflow. Now, seeking professional advice to do the diligence for you is crucial to survival.
Advisers can help reconfigure outdated business models that struggle in a volatile economic climate and provide effective debt management solutions for businesses that are faced with bills that appear to reproduce at a shameless rate.
We have continued to see institutions that have been at the forefront of business for decades, if not centuries, fall as a result of procrastinating to confront their financial vulnerabilities. So, one thing is clear - we can no longer base business decisions on forecasts and hope. The key to survival today is to be swift in seeking help early.