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Accountant survey suggests tax rises and public spending cuts will dent recovery

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Thursday August 26, 2010 at 1:29pm

Business owners are showing less confidence according to the recent Business Confidence Monitor Survey from the Institute of Chartered Accountants in England and Wales (ICAEW).

Around one fifth (19%) of firms said they were less confident about the future due mainly to the tax rises announced in the emergency Budget and promised public spending cuts.
Having come through recession, business owners now face a challenge to survive the recovery. Uncertainty is a key factor resulting in a cautious approach by many firms.

Michael Izza, chief executive of the ICAEW has been pretty clear what he thinks; “The Government needs to deliver on its commitment to ensure Britain is open for business whilst taking tough decisions to tackle the deficit.”

What’s your view? What are you doing to make sure your business survives the recovery?

Here are just a few thoughts based on what our clients tell us they are doing:

  • Don’t neglect planning and budgeting just because things are tough, if anything they are more important than ever before. 
  • Keep a close watch on your Key Performance Indicators (KPIs), making especially sure that they are the right measures for your particular circumstances. 
  • From a personal perspective look to maximise your earnings by minimising your tax liability. Turnover and profits may be down, but there may be ways to extract those profits more tax efficiently, or even be ways to pay employees differently that significantly reduces cost. 
  • Keep in touch with customers – if you’re not talking to them your competitor might be. Don’t let them forget you. 
  • Think hard about how you are structured and whether everyone in your business adds real value. If necessary take the tough decisions needed to reassign staff or make redundancies if you have to. 
  • Think, and be, positive – look at the things that are going well in your company or industry – can you build on these element? If nothing else no one wants to deal with someone who can only see doom and gloom ahead. 
  • Set time aside, at your Board meeting for example, to look beyond the day to day challenges and think about the future. It’s amazing how liberating this can be sometimes, even resulting in solutions to problems you’ve been struggling with for some time.

What’s your top tip for surviving, or even thriving over the next 12 months?

Andy Parker
Chartered Accountant and optimist

Comments on this post: (1 comment)

Teresa Harris | Thursday August 26, 2010 at 1:40pm
These tips are great - I particularly like the reminder to make sure you are keeping an eye on the right KPIs. The tip I always give my clients is to provide excellent service to customers. In a tough market, where a customer might be lured away by a price incentive from your competitor, they are far less likely to move if they feel they get great service and added value from you. And of course well serviced, happy customers are far more likely to refer others to you and help you grow your business....

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