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Summer solstice is here: West Norfolk businesses should plan for economy now with inflation hitting 9.1pc

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Michael Moore of Complete Commercial Finance of Lynn takes a look at the business scene in their monthly column.

As we pass the summer solstice and longest day of the year, it’s a good moment for companies to review their performance so far and to make plans for the next six months.

There’s no doubt that the pressure is on, with inflation hitting 9.1 per cent in May – the highest level since 1982 – two consecutive months of falling retail sales and car registrations stuttering with a 20 per cent year-on-year drop.

Complete Commercial Finance’s Michael Moore.
Complete Commercial Finance’s Michael Moore.

According to a study by accountancy and business advisory firm BDO, business optimism has dropped and a fifth of companies expect the cost of living crisis to be worse for their businesses than the recent pandemic.

Haulage is a sector which is particularly feeling the impact of increased fuel costs and one freight boss recently spoke out about the crisis, saying that the cost of running one lorry alone has increased by £20,000 – up from £41,000 to £61,000 a year – following a 50 per cent escalation in fuel prices.

With many parents reliant on buses to transport their children to school across county, September could see a spike in fares, with one coach company saying that it now costs £2,000 per week to fuel a single vehicle.

While it’s understandable that firms may be feeling cautious in the light of these headlines, it’s essential that they maintain a steady hold on business finances to ensure that, even if trade is adversely affected, they are able to weather the storm.

There’s no doubt that reduced consumer confidence and a drop in retail sales has the potential to affect businesses’ turnover, but rather than rely on an overdraft or cash reserve there are measures companies can take to protect their financial position.

In fact, business finance can be the greatest tool a company can adopt to create a manageable and reliable source of funding during tough times.

Asset finance, merchant cash advances and invoice discounting are all ways to release cash into your business and ensure that there are no pinch points should trade weaken.

The reality is that staff wages, suppliers’ invoices and tax responsibilities won’t wait for business to resume to normal levels and so by taking action now, before hitting a crunch, firms can alleviate these inevitable pressures.

We are keen to hear how local companies are finding trading and our annual Business Survey is an opportunity to share your experience and help create a regional snapshot of the issues impacting trade – add your views at https://www.surveymonkey.co.uk/r/NHMSY3F

• For more information, contact Michael Moore (pictured) at Complete Commercial Finance on 01553 611619 or visit ccf.finance

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