Business health checklist

Understand more about your business' health and what you can do to improve it.

One of the most important factors for businesses in the UK right now is finding a way to be resilient. Throughout 2021, business owners face the unrelenting prospect of much change and uncertainty.

Now the UK has left the European Union (EU), what can your business do to be resilient and ensure that you’re able to negotiate the next 12 months?

We’ve created this business health checklist to help you meet the challenges ahead.

Cash +

The adage that ‘cash is king’ might not be new, but it’s absolutely true. In good times and in bad, your business’ survival and strength comes from its cash position. A strong cash position gives you both the time and the flexibility to endure a softening market, or to capitalise on an opportunity.

Amanda Digne-Malcolm, Director of Practice at the Institute of Chartered Accountants in England and Wales (ICAEW), gave us these key insights:

  • Stay vigilant – keep an eye on your cash every month, and set up a regular conversation with an accountant.
  • Be prepared – plan for a worst-case and best-case scenario and other eventualities in between. Establish what you can do based on your current cash position. Review the potential positive and negative impacts, then solve those problems you face or take advantage of the opportunities.
  • Seek government support – the Government has put in place a huge range of measures to support small businesses, from rates relief and VAT deferral to the coronavirus loan schemes and the Future FundLink opens in a new window. Speak with your accountant to ensure you understand and can make the most of all of the help available.

Advice and support +

A crucial aspect of building resilience is not to go it alone. Understand what you’re good at and what your core offering is, then seek the most suitable advice.

Iain Wright, Director for Business & Industrial Strategy at the ICAEW, recommends this approach:

Seek professional advice

"The single best and most important piece of advice I could give any business that is experiencing or facing a challenge would be to seek the guidance of a trusted professional at the earliest possible stage.

"There are key players in a business’ ability to tackle challenges, and an accountant and a finance provider should be right at the top of that list. They can not only help you plan in a sustainable way, but more importantly they can help you avoid making really costly mistakes. Those mistakes are often magnified in tough times, like the ones that we’re experiencing now."

Relationships with suppliers +

The COVID-19 pandemic, the resultant lockdowns, the requirement for quarantine, and increased limitations on international travel have all had a significant impact on the supply chain of many UK businesses.

Grant Fraser, Global Head of eCommerce Finance at CBILS-accredited lender Woodsford TradeBridge, says that to build a resilient supply chain in light of COVID-19, businesses must constantly forge new relationships with suppliers, despite the difficulty of doing so in the short term.

“These relationships take time to build, are expensive and typically paid for upfront when you first establish them,” Fraser says. “However, by diversifying the supply chain, you reduce the risks around supply. You also open up opportunities to increase production or sales in line with surges in demand, or to negotiate better deals with existing suppliers.”

Grant also shared the following tips:

  • Diversify your supply chain – this ensures there is no single point of failure. Learn how to review your business' supply chain
  • Establish working capital – vital to fulfil orders and make the business more agile.
  • Explore finance options – import finance, invoice finance, factoring and supply chain finance all provide options that can help stabilise your cash position.
  • Seek expert guidance – it’s useful to understand funding solutions, payment terms and the implications of deferred VAT on items imported from the EU.

Innovation +

If necessity is the mother of invention, then times of financial uncertainty are most certainly the fuel of innovation. Businesses often point to the boom in technology start-ups in the aftermath of the global financial crisis of 2008–2009.

Throughout COVID-19, many businesses successfully pivoted from their regular practice or product to meet a new requirement of their market. The pandemic has seen the advent of the Future Fund, a finance facility created specifically to support innovative companies in the UK. Its goal is to support continued growth and innovation in technology, life sciences and the creative industries, among other sectors. As of the time of writing (December 2020), it has funded innovation to the tune of £975 million.

Joanne Whitfield, Fund Director at FW Investments, offers the following advice for innovative businesses that are seeking investment:

  • Speak to professional advisers – these experts, and other business leaders, can help you strengthen your business idea and establish a plan.
  • Connect with local enterprise partnerships – growth hubs are also great for providing support. Being in the right environment is essential.
  • Seek financial guidance – connect with a finance expert to learn about all of the support available for innovation at a local, regional and national level.

Regional support

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Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.