The HSBC business banking column
Exclusive to the Weston Echo, the HSBC business banking team in North Somerset tackle the major issues facing businesses in the region. With events such as The Olympics on the horizon, there could be an impact on local businesses of all sizes. In May’s column HSBC’s Cindy Condon highlighs ways to minimise any disruption and knock-on effect to your company’s bottom line.
With many large events and holidays coming up across the UK including the Queen’s Diamond Jubilee and the 2012 Olympic Games, it is crucial that businesses in Weston prepare for any disruption this may have on sales and, in turn, cashflow.
Through our experience of working with many businesses in Weston we know national or international events and holidays can put strain on a business, often resulting in late payments and delayed delivery of goods.
With that in mind, businesses must think ahead to ensure continued smooth trading throughout the disruption. With proper planning, many businesses in Weston will be able to turn upcoming events into a real business growth opportunity.
So what can a business do to put themselves in the best position to work within the constraints of the Olympics and the Diamond Jubilee celebrations?
Businesses should plan ahead for these events/holidays and consider their funding requirements to ensure they have enough working capital available to cover any payment delays, unexpected disruptions etc.
Putting in place early financial contingency plans may also save you from any last minute panics and ensure you are able to pay all your suppliers and staff on time.
Regularly monitoring and updating your cash flow budget will help identify any problems and predict potential cash shortages, while adherence to strict company guidelines around prompt invoicing and chasing outstanding payments vigorously will help mitigate the impact of any shortages.
If your business exports or imports internationally, it is important to consider that there may be delays in product arrivals and deliveries around national/global events this year due to international shipping delays.
For importers, make sure you have enough stock to fill orders over this period, should international deliveries be delayed. Sending out invoices in good-time will also help in avoiding avoid late payments, you may also wish to consider alternative sources of finance during this period.
Carefully manage supplier relationships
Building strong relationships with your key suppliers and keeping an open dialogue throughout your interaction is key to any successful business partnership.
In the lead up to major events, maintaining this relationship will involve speaking to suppliers and partners as soon as possible to inform them of alterations in delivery times and giving them notice of any possible business disruption.
Many businesses aim to keep stock levels to an absolute minimum but just think what impact a 7-14 day delay in receipt of raw materials and stock would have on your ability to supply your customers.
The reciprocal benefits of an open dialogue such as this should also see increased communication from suppliers and customers about any closures and delays they anticipate experiencing from their end of the supply chain.
Businesses may also like to consider putting in place an alternate network of suppliers and partners; for example, ensuring you have a wide range of suppliers and partners who are not concentrated in one geographical region can also help with disruption hits a particular part of the region, the UK or the world.
Planning for upcoming events can present an excellent opportunity for businesses to audit their relationships and business contingency plans. Thinking ahead, talking to business partners and seeking expert advice from your bank should all help in ensuring Weston businesses continue to run smoothly and prosper from exciting national events in 2012.