Updated: Aug 26, 2022
It’s hard to avoid the current headlines about rising costs which are hitting both businesses and consumers alike. The Bank of England’s report for August indicates that we still have some challenging months ahead, so it is important now more than ever to plan ahead and be prepared. Wyn Jones, our Regional Cluster Manager in North Wales, has spent over 37 years working in the banking industry and has weathered a few recessions in his career!
We asked Wyn what steps Welsh food or drink businesses should take now to manage risk over the coming months:
The first steps a business can take is to get their house in order. Prioritise a review of the following:
Talk to your suppliers, request extended terms if necessary. Consider increasing the number of suppliers to spread the risk to your business.
Review your debtors list daily! Make sure they stick to the terms you have agreed and take prompt action if they don’t. Update credit checks on all your debtors too for any red flags.
If it’s been a while since you did a stock check, do one as soon as possible – how much stock are you carrying? Do supply chain issues still apply? If not, why carry so much? You might have much more working capital tied up in unnecessary stock than you think.
Most importantly, make sure that you’re on top of your numbers so that you can easily forecast for different scenarios and make better informed decisions about your business, for example, what would the impact be to your business if the interest base rate went up to 4%? Are you using your management Information system to its full potential? Do you have a cost model in place to help with forecasting?
If you want to talk to the Sustainable Scale Up Cluster about managing risk in your food or drink business, book your confidential 1:1 appointment at one of our Scale Up Surgeries in September and October HERE
Getting the best out of your management information and accounting systems
Sourcing the right type of finance for your business
Understanding profitability of product lines
Forecasting & cost modelling in an uncertain world
Scaling your business through NPD
When and how to increase capacity
When to invest in Enterprise Resource Planning (ERP) or Materials Requirements Planning (MRP) systems