Five tips to help manufacturers maximise the upturn
Recent data would suggest that the UK’s economic recovery is no longer just gathering pace, it is entrenching. With so much good economic data around, manufacturers could be forgiven for getting a little carried away.
Our advice throughout the downturn has been that owners and managers should base their business and investment decisions on what their own management information is telling them and on conditions in their own particular sector, rather than getting distracted by the macro-economics.
The same advice applies in the upturn. While short-term opportunities can be exploited, growth and innovation must continue to be based on long-term business planning and strategy. Here are some top tips to help manufacturers stay grounded during the recovery:
Don’t let good habits go out of the window: Continue to keep a close eye on costs and budgets. Make sure you are producing 13-week cashflow projections and basing decisions on up-to-date management information. In short, maintain discipline with financial controls and practice robust debtor management.
Stay true to your business plan: Upturns present new opportunities. Of course, the potential of these should be explored and exploited where relevant, but don’t let this throw you of course. Remember your business plan and stick to your strategic objectives.
Make the most of available tax reliefs: Changes to capital allowances rules and generous R&D tax relief make it a good time to make investments in new products, plant and machinery. Speak to your professional advisers to ensure you are making the most of these opportunities.
Avoid the perils of overtrading: Overtrading happens when new orders you take on are out of synch with your capacity to do the work. It’s a common ailment during an upturn and can potentially derail your business if not properly managed. My blog tomorrow will offer tips for avoiding overtrading.
Take advantage of available business support: Just because your business is growing again, doesn’t mean you shouldn’t take advantage of business support that could help you prosper in the long term. I’m not just talking about grants, but funded business support programmes that can help with innovation, leadership skills and mentoring. Again speak to your advisers to see what’s available in your area.
Ginni Cooper is head of the manufacturing team at Chiks