What does 2013 hold for me?

The last time a government Minister used the words ‘Green Shoots of Recovery’ their standing in the eyes of the public was similar to the fall of Icarus when he flew too close to the sun. However, business confidence does appear to be on the up albeit only marginally.
Strangely, an upturn in the economy can often mean that businesses who are well managed and appear to have good working relationships with their bankers can find that they are under attack. Principally, this occurs because in a recession banks try to protect their balance sheets by applying forbearance so that they don’t have to declare the shortfalls on foreclosure as losses. This means that more businesses survive than might otherwise be expected. However, in an upturn where assets value begin to increase the potential for losses decrease and banks show more interest in the loan facilities on their books. So, how does a business deal with this change in approach?
• Be careful about over-trading. There is a temptation to take on contracts when the business has insufficient working capital. The temptation increases as more work becomes available after such a long period of stagnancy.
• Ensure that your debtors are paying you on time. If your debtor book is ignored you will become a low- or no interest bank to your customers. In order to avoid over trading dependent on the business having sufficient working capital that is often tied up in your debtor book. Look to go legal where you need too but with a cost effective solution.
• Take advantage of the opportunities that present themselves but ensure that there is sufficient working capital to provide a good service to all your clients existing and new.
• Keep in constant contact with banking relationship manager. If they do not react the way you would like then you should consider changing banks or managers to ensure that the person working with you accepts, understands and is sympathetic to what you are trying to achieve.
• Be careful as Landlords start to look to increase rents through rent reviews. As asset values increase Landlord’s naturally look to increase the return from the investments.
‘Green Shoots’ or not funding does not seem to getting any easier to find but hopefully this will change as the assets values increase.
Whatever the New Year holds in respect of the economy we wish you and your business a Happy and Prosperous 2013.
Brendan O’Brien
Head of Business Services
Breeze & Wyles Solicitors LLP


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