survival of the fittest credit crunch

Survival of the Fittest – Credit Crunch

Few people and businesses have not been affected by the Credit Crunch. It would be foolish to imagine that the rest of 2009 is going to be easy. There will always , of course, be winners and losers.
Take the situation with the value of sterling. Since July 2008, the pound has fallen by around 25% against the Dollar and Euro.

So, whilst travel agents will struggle to sell foreign holidays, the UK tourist industry is hoping to cash in. Most exporting manufacturers will be better off as their products will be very competitively priced. However consider the situation if a manufacturer has to import components. Additionally, as this is a global problem our export market is feeling the impact of recession – it’s shrinking.

You may have heard about the bonanza retailers in Northern Ireland are experiencing as customers from the south flock over the border to spend their Euros. But spare a thought for retailers south of the border, some of whom are experiencing their worst trading results for over 30 years.

The media is full of stories of high street names going into Administration or Liquidation. Even in a buoyant economy, the period between Christmas and Easter is notoriously quiet for many businesses. These include the likes of pubs, retailers (after the sales have finished), restaurants, etc.

Builders, property companies and estate agents are already struggling and there have been problems in the businesses supporting the property industry. Including such as removal companies, surveyors, conveyancing solicitors, etc. In time, it will bottom out and the harsh reality is the businesses which survive will be leaner and fitter. In many cases, the survivors will have restructured their operations. And when the dust settles, some owners of businesses which have fallen by the wayside will look back and wished they had taken action before the situation had deteriorated to a level beyond help. Financial problems can snowball at an alarming rate and once word gets round that a business is struggling many regular sources of credit dry up. Suppliers, the bank all start drawing in their horns and cut off the vital lifeblood of any business – cash.

So, if you are running a business and are worrying about cash flow, the worst thing you can do is absolutely nothing. Inaction can drastically reduce the options available to you, whereas acting quickly generally prevents the company’s financial position deteriorating further. No matter how serious a situation might seem to be professional advice can help. At Wilson Field our staff have a wealth of experience and will listen to you and assess the best way forward for your business.

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