Karl Lanham of King’s Lynn Complete Commercial Finance gives business advice on staying ahead of costs and inflation

For many, 2021 was a bumper year with unprecedented levels of trading, a much-needed golden moment after the disruption of the pandemic.

In particular, many in the leisure and tourism sector enjoyed 100 per cent occupancy rates last year as the nation booked staycations in the absence of a jet-away, and consumer spending soared in property, construction and retail.

It might seem that 2022 has been a slow start by comparison, with a tempering of consumer spending, fuelled by the rising cost of living and unprecedented hikes in energy costs.

Karl Lanham, CCF.
Karl Lanham, CCF.

However, while chatting with a leading estate agent recently, he remarked that while 2021 was incredible it would be wrong to assume that the Norfolk property market is now faltering – in fact, in his company’s experience, the first half of 2022 has outperformed pre-pandemic levels of 2019, making it still a very positive start.

Undoubtedly the global economy is facing challenges and the threat of recession hangs over almost every headline, but there are ways that businesses can prepare themselves in an attempt to buffer the impact of a slow-down and ‘recession-proof’ their operations. The sensible approach is to proceed with a degree of caution, but to look for new opportunities in your sector.

Some of the challenges in recent months have surrounded staff shortages and the rising cost and supply of materials. In both cases, now might be a moment to look at your operations and consider changes which could reduce your dependency on outside forces. Could investment in machinery automate production and reduce your reliance on manpower? There are many engineering firms with an expertise in automation in our region and an investment in equipment over five or more years could improve productivity with expenditure recouped against potential savings on staffing costs over the same period.

Similarly, as the cost and logistical challenges of importing materials spirals, perhaps now is the time to consider onshore production to create continuity and security for your supply chain. Whether it’s reviewing the market for suitable UK suppliers or considering infrastructure investment to bring production in-house, now is a key moment to create stability for your business.

An asset will always create value for your company and could be the difference in enabling your business to trade efficiently and effectively, particularly while external conditions are less certain. Asset finance is an everyday business tool which can help your business to grow without dipping into precious reserves.

The problem with the alternative option of throwing the anchors on and adopting an overly cautious approach is that it’s easy to fall behind, leaving others to take advantage of new opportunities and you playing catch-up as market conditions ease. There are a number of ways to manage cashflow and, while the Government’s Recovery Loan Scheme draws to a close at the end of June, commercial finance can be extended to reduce the cost of borrowing and enable you to protect reserves.

The old war chest scenario still makes a lot of sense during unpredictable times and keeping cash in your business will ensure you are able to remain agile and weather tough times. If you are feeling unsure about the ‘new normal’, now is the time to talk to your business finance adviser and explore the options available to navigate the coming months.

• For more information, contact Karl Lanham at Complete Commercial Finance on 01553 611619 or visit ccf.finance

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