Business firms look to future challenges
Few businesses need reminding that we are now eight years on from the onset of the financial crisis of 2007/08. Our local business community has changed immeasurably with some of our most high profile businesses unfortunately shutting their doors for good.
Thankfully, confidence is gradually returning, albeit at a slower rate than we would wish. With announcements of job creation now more common, increased funding available, and transactional activity on the up, on paper it would seem that this is the time that all businesses within Northern Ireland should have growth at the forefront of their strategies.
However, the insolvency statistics for Q2 in Northern Ireland show corporate insolvencies were up 41.8% on the same quarter in 2015, with personal insolvencies up 8.5% over the same period.
Most businesses are facing a long-term legacy of the financial crisis. Since the onset of the financial crisis, growth has not been an achievable aspiration; merely keeping their doors open has been their fundamental objective. Businesses in this position are usually shackled by cash flow pressures and typically operate on a month-to-month or even week-to-week basis.
But there is no such thing as a one approach fits all model for turning a business around. An effective turnaround strategy needs to be bespoke and multifaceted. This often involves a complex consideration including a short and long-term strategic review. For many, carrying out a review of this nature is difficult, if not impossible.
Firstly, many simply do not have the time. Most people are so heavily engrossed in the day-to-day they are unable to produce a truly independent and effective medium to long-term strategy that will turn their business around. This is where management need to seek professional advice.
Worryingly many businesses are still heavily exposed to the economic challenges that are still to come, without an effective plan for how to mitigate these risks and continue to meet their objectives.
With growing fluctuations in the international money markets, ongoing public sector cuts, increasing changes to consumer trends and the obvious uncertainties surrounding the mechanics and timing of Brexit, management need to be agile and alert to these and the other challenges to come.
* For further information Ian Davison can be contacted at firstname.lastname@example.org or visit http://www.grantthorntonni.com
Grant Thornton (NI) LLP specialises in audit, tax and advisory services.