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How bad could it be for UK Businesses?

How bad could it be for UK Businesses?

We all know that there are only two certainties in life – but at the moment there appears to be a third: negative stories in the media about the outlook for UK businesses. 

Clearly times are difficult at the moment. The pandemic has been followed by supply chain issues and inflationary pressure, both compounded by the war in Ukraine. It has certainly given the headline writers plenty of ammunition, with City AM forecasting a ‘profit squeeze as inflation bites’ and following that by suggesting that small firms face a cost ‘assault’. 

Not to be outdone, the BBC declared there was a ‘big jump in the number of firms at risk’ and that UK businesses faced a ‘perfect storm’ as the recent tax rises kicked in. Even the CBI joined in, saying that firms would ‘need help to make it through the summer’. 

At this point any right-thinking businessman or woman would surely take the only logical step – pull down the shutters and put the business up for sale. 

It is worth pointing out though, that journalists are not entrepreneurs. They do not see the world in the same way. As the old cliché has it, the Chinese character for crisis is made up of two other characters – danger and opportunity. 

That’s not correct but, like all clichés, it carries an element of truth. Yes, there are supply chain problems – but does that represent an opportunity to bring manufacturing back to the UK? ‘Re-shoring’ as the management term has it. 

Yes, there are cost pressures on profits – but entrepreneurs won’t be writing articles about it, they’ll be looking at their budgeting and their key performance indicators and taking whatever action is necessary. 

It’s interesting to note that the FTSE-100 index of leading shares has proved resilient to the bad news, both about the war in Ukraine and the stories in the media. In April, major stock markets in Europe, the US and the Far East all fell: the FTSE held its own, with a small gain of 29 points in the month. 

So maybe the news isn’t quite as bad as the media likes to portray. We have some brilliant businesses in our client bank and we’re proud to be financial planners for both limited companies and sole traders. Anecdotally, many of our SME and self-employed clients are positive and optimistic about the future. They’re certainly working hard and – as we have always done – we’ll do everything in our power to support them. 

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