Many UK agencies would not be prepared for a recession if it were to occur, with those not adequately focused on their infrastructure at risk of going bust, a report by accountancy firm, The Wow Company has revealed.
The report, How recession-proof is your business, tests the resilience of organisations across the country, and its findings have shown that a large proportion of business leaders remain vulnerable to a downturn.
As economic uncertainty continues, 15% of the 500 business owners surveyed admitted that they only have enough cash to cover themselves for a single month of overheads, should trade take an unexpected dip.
“The current state of play is quite alarming for small firms,” said Peter Czapp, co-founder of The Wow Company. “Many owners are just one bit of bad news away from going out of business completely”.
“One in five firms aren’t making any profit, and 15% are living on the edge of their personal finances, so the concern reflected in the report is understandable.”
While there are some eye-catching statistics within the report, it also contains practical suggestions for things that business owners can do differently to increase their chances of success, including some immediate steps that can be taken to safeguard businesses moving forward.
There’s also good news, as small businesses are getting paid quicker than ever before. It now takes the average business 27 days to get paid. When reduced payment terms were coupled with utilising software, those average days were reduced to just 17.
“This report highlights business fundamentals that are easy to forget as businesses chase growth,” added Czapp. “If you follow the guidance contained in the report, you’ll be in the best possible shape to thrive whatever the economic conditions.”
Download a copy of the ‘How recession-proof is your business’ survey.