During the lead up to the Christmas break, the dismal weather and dark mornings often force business owners to question why they are getting out of bed to face another day at work. But in fact, the end of December is the perfect time for business owners to reassess what they are doing and more importantly, what they want to achieve in the coming year.
We all know that starting and running a business is extremely challenging, there are many reasons why people initially set up or buy businesses- maybe it is to safeguard an income stream, to provide a lifestyle for themselves and their family or to create a valuable capital asset.
But whatever the impetus that prompted it, once the business is up and running, the vast majority of owners would acknowledge that the business never stands still.
Andrew Durbin, a partner at Smith Cooper Corporate Finance, a division of leading Midlands’ accountancy and business advisory firm Smith Cooper commented: “The Christmas break is a great time to do some soul searching about your business. Business owners should think about whether it is moving forwards, backwards or staying still and what goals you want to achieve in the New Year.”
If the business is moving backwards, careful consideration needs to be given to how this situation could be rectified. This may be by seeking marketing and sales advice, carefully reviewing the cost base or making a strategic business acquisition.
On the other hand, if the business is progressing well, should this progress be accelerated though investment in people, machinery, acquisitions of other businesses. Alternatively, should some or all of the value be ring-fenced through a sale?
With the uncertainty brought about following the financial crisis many business owners have delayed the sale or part sale of their business and may benefit from assessing their relative trading performance in sector or whether their sector is consolidating. It may be worth considering what their business is currently worth. Increasingly some business owners are also identifying development phases as good times to sell some or all of their business to ring fence wealth.
All these options, whilst by no means exhaustive, clearly raise many other questions which need to be answered in conjunction with an honest assessment of the owner’s objectives.
Andrew added: “Make it your resolution this year to give serious consideration to the future of the business so that you don’t simply get out of bed in the morning but jump, ready and eager to face a new day”.