K2's Business Update | Edition 6
Tony Groom
Hands-on director and investor in companies with huge growth potential that have undervalued intangible assets.
Welcome to our latest update for businesses
I hope you had a restful break over the Christmas season and are now back into the swing of things in this new year.
I’m pleased to say the year begins with a glimmer of hope that inflation might have peaked ahead of predictions. Businesses will still face a tough year throughout 2023?but this is welcome news to us all.
Unfortunately the rest of the news still points to a creaking economy and a nation struggling with the cost of living crisis. Strikes continue among workers from many different sectors, including postal workers, rail workers, highways workers, NHS staff in hospitals and ambulance.?
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In this newsletter:
Message for accountants and professional service firms ??
Check out our latest video for accountants and professional service firms.
Flexible working is becoming the default???
Flexible and remote working is now accepted by many businesses according to research by two UK universities.
York and Birmingham Universities found that the two years of Covid lockdowns had changed managers’ attitudes and many now believed that it actually improved productivity.
While three quarters of managers were now of this view, 62.5% of them also believed that it boosts motivation.
It also found that there was a growing use by businesses of surveillance software to monitor remote workers, monitoring emails and time spent working.
Given the cost pressures that businesses are under these findings could benefit them in other ways.
The Government recently announced that energy support schemes for businesses will be scaled back by switching to a new flat rate per unit discount.?
If you are able to downsize your premises and have your employees work remotely more often then it might be something to consider.
Doing so would reduce their energy costs significantly and mitigate the effects of the ending of the current energy price cap in March.
The director of the BCC (British Chambers of Commerce) has urged the Government to consider other support measures to help businesses “otherwise we're going around in circles.”.
The one question you can ask to decide if your business is worth saving ?
Conditions are especially tough for business owners in manufacturing right now.
The cost of everything is going up and the declining economy means you’re having to fight for every sale.
Many will be doubting how long they can keep the factory going and have begun asking if they shouldn’t just throw in the towel.
If this is you, then my heart does go out to you. I have several factories myself.
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If I can offer some small support to you then it would be in the form of a question you can ask yourself to discern whether you have a business that is worth saving or not.
It’s the first question I ask when assessing a business’ prospects before getting involved:
“Do you have a motivated workforce?”
If your staff are feeling motivated to work and if they believe in the business then you can make almost anything work.
Even when others lose heart and want to give up.
There are obviously degrees of enthusiasm and not everyone will feel the same way but a few good people can really make a difference.
When times are tough reassurance about the future can be difficult but this is a huge part of my job as a turnaround investor.
The key to the future is a motivated workforce which is why people are my focus. They are best barometer for the prospects of a successful turnaround.
I would urge all owners to speak with their workforce as without them there is no future.
Don’t leave it too late to restructure ?
Corporate insolvencies rose by 32% (1,964) in England and Wales in December 2022, compared with the same period the year before. This is according to Insolvency Service data.
A combination of high inflation, rising interest rates, poor consumer sentiment and increasing raw material costs is putting more pressure on businesses and is expected to continue throughout 2023.
But insolvency, as we have said many times, does NOT have to be the end of your business.
However, you need to take action.?Ignoring the problem will not make it go away.
You can get help but you must be willing to be honest about the situation.
K2 Partners is here for you and?happy to have an initial chat to understanding the issues involved in the next steps you may need to take.
The name says it all. We are your partners in times of difficulty.
It only takes one call or message to start the process.
K2's Cash Management Tool
This tool is designed to assist in managing cash on a weekly basis by enabling you to plot your expected cash in and outflows, and then adjust them to manage your cash position.
Its primary function is to ensure you manage cash in a way the prioritises payments for those vital supplies needed to trade so you can generate invoices and get paid.
About the Author?
Tony Groom ?is a turnaround and?restructuring professional with? K2 Business Partners ,?a firm that invests in companies that have committed boards and assets that others find difficult to value.???
“As a turnaround investor, I back Directors of industrial and manufacturing companies who are facing a crisis. I bring an understanding of business as a Director and Shareholder of the many businesses and turnarounds that I have helped make successful.”
About K2 Business Partners??
K2 Business Partners ?are a small team of turnaround investors who put their money where their mouth is by backing directors and companies with ￡3m-￡20m turnover with assets that other investors find difficult to value.??
K2 don’t generally sell out and are in it for the long haul!?
Contact us if you’d like to know more about our investment process and to book a?free strategy and viability review .
Senior Partner at Worldpronet
1 年Hi Tony, It's very interesting! I will be happy to connect.
CEO Enviro-Cap.com and ThePigeonhole.com. Investment Partner at K2 Partners focussed on acquisitions. Hands on financial and operational restructuring background. Business author.
1 年And just to add to the pressures on businesses just seen that BoE is raising base rate again today.