Happy New Year from everyone at Drummond Laurie and best wishes for a successful 2018. After such a turbulent 2016 in which we experienced the Brexit vote and a change of Prime Minister, we hoped for a more tranquil 2017. We should have known better! Theresa May called a general election which she surely now regrets, finding her government propped up by the DUP. In Scotland we are now likely to “boast” both the lowest and the highest rates of income tax in the UK, with 5 different tax codes inflicted on us by our SNP government similarly propped up by the tiny Green party. And through all of this we have seen the commencement of the Brexit negotiations which seem sure to provide us a rollercoaster ride as stage 2 talks get underway in early 2018.
Surprisingly to many, our economy has remained remarkably resilient throughout all of this turbulence. Unemployment is low and employment is at record high levels. The impact of the weak pound has resulted in inflation creeping back above 3% and, as a result, we have seen the first increase in the bank base rate in over 10 years, albeit only going up to 0.5%. Economic growth has slowed with almost all forecaster suggestions it could slow further still in the coming years.
So what should business owners be focussed on as we head into a new year? As ever at this time of year it is important to look ahead and to plan for the twelve months ahead. Failing to plan is planning to fail! Budgets should be in place now for the year ahead which will hopefully recognise the risks and opportunities which lie in wait. We always encourage our clients to identify their main business risks and to take steps to mitigate these before they become major issues. These might include some of the following:-
- Over reliance on one key supplier – Take steps now to identify alternatives and try them out when things are going well rather than when you are suddenly put in a pressure situation.
- Over reliance on a key member of staff – “Insure” yourself against the impact of losing this person by ensuring that their skills and knowledge are transferred to others within your team in a controlled way.
- Over reliance on a particular customer – A more difficult risk to overcome as very few people will turn down orders from a good customer. However you can channel your sales and marketing efforts in a different direction to help reduce your exposure to one customer or one narrow sector.
- Over reliance on one product – In today’s world where technology moves so quickly very few products are immune from being superseded. Devote time and resource to new product development/ sourcing, to ensure that your business cannot be easily “superseded” by one technical advancement.
Make it your new year resolution to address any risks in your business before they become major problems for you. Our team at Drummond Laurie are experienced at identifying such risks and advising clients on mitigating actions so if you are not already a client please get in touch to see what we can do for you.