Is your business ready for 2018?

Wednesday 10 January 2018

The new year has begun, which is traditionally a time for people to think about the 12 months that are to come and what they might change to make them better. If you run a limited company you will be familiar with this, as you will need to be constantly preparing for the future in order to maximise your profits.

However, it seems that many business owners are not feeling confident about 2018, according to the latest Small Business Index (SBI) from the Federation of Small Businesses (FSB). After a positive result at the beginning of 2017, the index has dropped each quarter to read -2.5 for the last quarter of the year.

This indicates more negative sentiment than positive from small business owners, which is only the second time this has happened in the last five years. The last time confidence was this low was in Q3 2016, which was largely fuelled by the uncertainty following the vote to leave the EU.

The negative sentiment seems to be due to financial circumstances, as the proportion of small businesses reporting a fall in profits is at its highest since 2013, with 41 per cent making less in Q4 2017. This in turn might be driven by increasing operating costs, which were reported by 73 per cent of SME owners: a five-year high.

Brexit is often seen as another factor that seems to be weighing on the minds of the self-employed. However, Mike Cherry - national chairman of the FSB - said: "While the swift agreement of a transitional arrangement and an ambitious free trade agreement with the EU are absolutely critical, it’s spiralling costs, weak growth and flagging consumer demand at home that are front of mind for small firms day-to-day."

Mr Cherry pointed out that the late-payment crisis - which has led to a total of £18 billion being kept out of the hands of the small businesses that earned it - is further contributing to the financial pressure felt by SMEs. He added that small business commissioner Paul Uppal "must make ending this debilitating crisis his top priority".

No matter how much experience you have running your own business, financial planning is crucial to navigate what could be a tough year. If you are looking for a specialist limited company accountant that can provide you with help and advice, look no further than Brookson. Get in touch and book a consultation with us today.

By Victoria McDonnell

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