Economic Challenges: A Guide for Small Businesses
Adapting to Economic Challenges: A Guide for Small Businesses
In light of recent economic developments, we at DJ Grigg Financial want to provide you with the necessary insights and support to navigate these challenging times. Many small businesses are currently facing significant risks due to economic challenges, and it’s crucial to address these issues proactively.
Key Insights on Small Business Collapse Risks
Recent reports from ABC News have highlighted the increasing risk of collapse among small businesses. As your trusted advisors, we recognise the importance of addressing these concerns head-on. Here are some key points to consider:
- Struggles Across the Board: While larger enterprises may be weathering the economic storm, many small businesses are struggling to stay afloat. It’s important to assess your current position and experiences.
- High-Risk Industries: Industries such as food services (including restaurants, bars, cafes, and pubs), construction, and transport are particularly at risk. If your business falls within these categories, extra vigilance is required.
- Increased Risk of Failure: For small businesses with a turnover of up to $10 million, the risk of failure has risen by 20% in the year ending March 31, 2024.
It may be comforting to know that even successful restaurateurs are feeling the pressure, with some deciding to close their doors despite their past successes. This underscores that making an informed decision to close down is not a failure but a strategic move in tough times.
Taking Action: Ways We Can Assist
We are here to support you with actionable steps to safeguard your business:
- Business Planning: We can assist with strategic business planning. This involves reviewing your current operations, identifying potential risks, and developing a plan to mitigate these risks.
- Pricing Strategies: We can help re-evaluate your pricing strategies to ensure they remain competitive and profitable.
- Budgeting: Creating detailed budgets can help you manage your finances more effectively and prepare for potential downturns.
- Insolvency and Restructuring Advisors: Bringing in experts can be crucial for early intervention. These advisors can provide a comprehensive overview of available options, whether it involves restructuring or closing the business to prevent further financial losses.
Before the End of Financial Year – Let’s Talk
For those experiencing downturns, an end-of-financial-year review can substitute for a tax planning review. While the process of crunching the numbers remains the same, the focus shifts to reassessing your financial health, setting business and personal goals, identifying areas for improvement, and developing strategies to weather the storm or plan an exit.
Remember, we are here to be your confidant, advisor, and friend during these times. We are committed to guiding and supporting you through these challenges. Please feel free to reach out to us to schedule a consultation.