Profitability & Cashflow- The Keys to a Successful Business

Hoping for the best….or Doing your best.

I’m usually interested in the results of surveys amongst business owners and managers.  Usually there’s nothing too startling in these.   But some results from InterTradeIreland’s Business Monitor Report for Sept-Dec 2016 recently released really surprised me such as:

  • 98% of Irish companies have no plan in place to deal with the consequences of Brexit.
  • Only half of businesses with cross-border sales were concerned with the Euro/Sterling exchange rate.

I would have thought practically all owners/managers have been thinking quite a lot about Brexit.   No matter whether you are entirely domestically or partly/fully export orientated it’s going to have a significant impact on all businesses.     When I read that 98% of companies had no Brexit plan I just assumed it was meant to indicate they’ve no really serious, detailed plan of action as distinct from having no plan whatsoever.   But when this is combined with the other finding of only half the businesses doing cross-border trade are concerned about the exchange rate you begin to wonder how well they would be prepared for Brexit and volatile exchange rates before it happens.

Some other results from that survey include:

  • Around 1/3 of firms say that they are running at just break-even and 78% are already running close to or at capacity.
  • Half of respondents mentioned rising energy and other overhead costs as concerns.
  • Many businesses are struggling to find good staff.

Although many results from this survey were showing quite positive trends (a majority of firms operating close to capacity, construction activity growing strongly, exporters doing better than domestic-focused businesses etc.) when you examine the findings, some elements of complacency seem evident.

The downsides and any potential upsides of Brexit have all been explored at length elsewhere.  But irrespective of the actual final nature of Brexit, the most likely outcome for Irish businesses will be that those well-prepared will get through it, while those ‘just hoping for the best’ could be in for a very difficult time.

Even if your business is operating at almost full capacity, just breaking even, with rising costs, difficulty getting good staff (or possibly likely getting the best out of what you’ve got), then you can still look at improving your situation rather than just hoping everything will just work out okay.

On the other hand, if you’ve got a proper handle on all your business activities with plans for Brexit etc. you are doing much more than ‘just hoping for the best’.  You are doing your best.

Moving from hoping to doing isn’t too difficult.   As the Nike ad says: ‘Just Do It’.

Contact Sean Donnelly