Business owners in the Midlands have claimed they have little to no funds to see them through another lockdown, a study has found.
The survey of 200 business owners in the region, commissioned by Prime Accountants Group, found that almost 70 per cent of businesses did not have the means to survive a rainy day, with close to a third not even knowing how much money is currently in their business account.
It also emerged that almost 90 per cent of business owners across the Midlands don’t even have a contingency plan in place if a key person in the business was to pass away or leave suddenly.
Unsurprisingly, of those surveyed, almost 50 per cent claimed their business significantly suffered with the onset of the pandemic.
Kevin Johns, managing director of Prime Accountants Group, which has offices in Solihull, Birmingham and Coventry, said: “Covid-19 and various lockdowns over the past 18 months have led to a sharp rise in unemployment and business failure, which is not surprising.
“However, the results of the survey show that most businesses seem to be living in the present and not planning effectively for a brighter future.
“While I do understand it is important to endure these uncertain times as best as possible, businesses will significantly benefit if they take the time to plan and implement financial strategies that can impact and improve their future.
“Cash flow management is so important, now more than ever before. Cashflow is essential and while it is fantastic to have a budget at the start of the year, it needs to be used wisely and reviewed regularly to ensure that concerns are addressed and you are making all the right moves to secure higher profits.”
The study found more than 60 per cent of Midlands business owners were not able to give their staff salary increments in the last year, with only just over 10 per cent of them able to give employees bonuses.
Of those which were able to save during the pandemic, a third (30 per cent) have invested money back into office equipment to allow for flexible working, including purchases such as laptops and phones.
More than a quarter (27 per cent) said they have had to invest in software development programmes to ensure the business would run smoothly in the following months.
A quarter (25 per cent) have changed their usual way of operating due to the pandemic, with most unsurprisingly moving to online and purely remote working. A further 10 per cent were also re-evaluating their business structures, with many more likely to now hire freelancers and consultants as opposed to full-time employees.
Kevin added: “It’s great to see that businesses in the Midlands are empowering their workforce with the right tools they need to work from home.
“However, I strongly believe that a lack of close contact can stifle innovation, so I urge business leaders in the Midlands and beyond to revaluate their decision to close down offices and instead implement a flexible working culture that strikes a balance between working from home and in the office.
“Here at Prime, we had implemented flexible working structures for years prior to the pandemic and it really can help to get the best out of your team.
“Also, getting the help of an expert can make a world of difference in how your business grows, especially in this post-pandemic world.
“Financial advisors can help in the setting up of a business and can help you help you keep on top of your finances as your business develops.
“It can also be useful to get their insights into business planning and cash flow modelling, which will help focus on costs involved; highlighting particular pinch points through the year,” he concluded.
For more information about Prime Accountants Group, visit www.primeaccountants.co.uk or search for Prime Accountants Group on LinkedIn.