MERSEYSIDE business lead-ers yesterday asserted the importance of cash if firms are to remain stable in the current economic conditions.
Receiving payment for work done, controlling costs and getting finance from banks are issues worrying business owners trying to take charge of cashflow.
Andrew Moss, corporate finance partner at Duncan Sheard Glass, yesterday said the ability to manage cash-flow will be the critical factor in the difficult months that lie ahead. “Very few businesses go to the wall because of a lack of customers, many collapse because of a lack of cash,” he said.
“Cashflow could well be the most important factor in determining whether busi-nesses thrive and survive or struggle and collapse during the coming months. Working with key staff, customers and suppliers is more important now than ever before.”
He told the members of the DSG Business Owners’ Club to expect a challenging period ahead.
He said: “We have seen evidence of the banks adjust-ing overdraft and credit pric-ing facilities.Š So it is vital to keep your banks on side and informed. It is in times like these that the old business adage – turnover vanity, profit sanity, cash king – is at its most compelling. Plan-ning ahead now is the key to success. Conducting a thorough review of business operations, especially credit control and overheads, will stand businesses in good stead to trade through the downturn and strengthen.
“Business owners must look to their revenues and costs, and their working capital management, in order to ensure they have the profits and cash to keep the business running and maintain and develop business stability.”
Jack Stopforth, chief executive of Liverpool Chamber of Commerce, echoed his sentiments.
He said: “Companies must make sure they don’t allow people to string them along on payments, they must control costs, manage cashflow and generate as much cash as possible.”
And the Federation of Small Businesses’ (FSB) Liverpool branch chairman Chris Burgess expressed his concern that small businesses were being affected by banks’ unwillingness to lend money. A national FSB poll found 40% of businesses said clearing banks had raised the cost of loans and overdrafts.
Mr Burgess said: “We have had calls from members in this area who are genuinely concerned that their businesses are going to collapse following changes by their banks to the terms of long-standing overdraft or loan agreements, imposing sky-high interest rates that are unworkable.”
