Business Matters: Never give up
Marc Henstridge, head of risk at Atradius UK & Ireland, believes businesses should look after their own interests amid ongoing economic uncertainty.
It has been an interesting few weeks. Following reviews of growth and inflation, this week has seen the Bank of England inject a further £75bn into our economy, to try and prevent further deterioration. Specifically, the aim is that it will be used by banks for business lending, to help keep British businesses afloat. Whilst we await the outcomes, the sentiment at least, is well-judged.
The Q2 Insolvency Service statistics for England and Wales show that 4233 businesses went into liquidation between April and July, already 4.4 per cent up on last year. In addition, British businesses are coping with “time” being called on the Time to Pay tax deferral scheme.
And further afield, emerging economic hazards continue to confound even the most rigorous financial experts. Italy has joined Ireland as an additional “I” in the “PIGS” economies which continue to send shockwaves throughout a very straitened Eurozone. The US Federal reserve Chairman has warned this week that the Eurozone will impact them too, saying that the US’ economy is “close to faltering”.
Compound all of these factors this with the fact that most commentators predict rougher times ahead and all in all, this feels like an uncomfortable time to be in business. But being in business is what is going to get us out of this trough and back on the real road to recovery – perhaps it is time for those running businesses to stop listening to the big picture doom-mongers, and to focus instead on things within their control.
Earlier this week, David Cameron urged Britain to be positive and not to wallow - and he is right. These are unrelentingly tough times, but the slowing – or worse, cessation - of business activity is simply not an option. Now, more than ever, is the time for businesses to be bold and to keep going.
Key to any piece of trade is the unavoidable truth that every business must be responsible for their own risk management strategy. This means continuing to trade, but using every tool at hand in order to conduct the best trade possible for your business.
With economic uncertainty a fact of life, no business can afford to trade with customers who keep them in the dark. If your buyer avoids openly sharing their trading information with you, then their ability to pay may be questionable. Do your homework. If necessary, outsource your credit risk management or invest in tools to help you keep an eye on your trading partners on an ongoing basis. The main thing, in the words of another British Prime Minister, Winston Churchill, “Never, never, never give up.”
Leading trade credit insurer Atradius covers over €465bn of Euros of trade credit around the world each year on behalf of businesses of all sizes. Through a highly skilled team on the ground in 160 offices across 42 countries, we protect businesses from the impact of non payment. The new monthly Insider Atradius Barometer series will look at the real role of credit in the UK’s regional economies. www.atradius.co.uk
