West Midlands companies need to make sure they have a Plan B if they are to ride out the rough times ahead, corporate recovery experts at Mazars are warning.
Corporate recovery partner Steve Wood said that business owners should not rely solely on a seasonal surge over Christmas as a double whammy was on the way.
He stressed that it was vital that businesses consulted their professional advisers now in order to lay down their plans.
“We are seeing a gradual squeeze on business as HMRC starts to wind up the Time To Pay scheme for PAYE, VAT and other corporate taxes.
“And we cannot forecast what the full effect of the Comprehensive Spending Review will be as it works through the public sector and into the private sector.
“Only time will tell how this translates into consumer confidence in the High Street and those businesses that rely on a seasonal surge over Christmas and into the January sales should make sure they have a Plan B to ensure their survival.
“Finding out in mid-January that sales have not gone according to forecast is too late, but if directors take the time now to lay down their plans, they could in many cases enable their businesses to survive.”
He said that tough choices need to be made and factored into Plan B and despite loud public pronouncements that credit is available to small to medium sized businesses, directors should not expect to look to their banks for support.
“The days of the unsecured overdraft, or the short phone call to your bank manager to raise your limit for three to six months, are over.
“As well as bank finance, you need to explore all avenues of finance,” he said.
Looking at the options now means that directors can plan with confidence now for the rough ride ahead that their businesses may be facing.
“If you have plans in place, you are in control. You can choose when and how to act to ensure your business survives.
“If you don’t plan, when problems occur it is invariably too late and you have run out of time to find a solution.
“The businesses that will survive and thrive are the ones that took harsh decisions early on and trimmed their businesses not in line with the picture now but with how they foresaw the situation could develop.
"West Midlands businesses can beat this downturn and they can come out of it ahead of the competition - but only if they take steps to plan now.”