Too many business owners are risking their companies’ survival by relying on a single customer or supplier.
According to a large research study of business owners across the UK, Haines Watts has found many owner managers have an ‘all eggs in one basket’ approach to their finances.
They invest heavily in their business, while at the same time relying too heavily on a few strategic partners or customers.
For Love Or Money? is based on a UK wide survey of business owners and reveals an unhealthy degree of reliance on the business to provide for the owner’s financial future.
Mike Lloyd, managing partner at Haines Watts Swindon, said this is a massively risky strategy (even more so since the recent Brexit vote).
“Leaving your financial future at the mercy of a key member of staff, client or supplier, or indeed your own continual availability isn’t a sensible solution at the best of times, let alone with the uncertainties of a post-Brexit business environment, “ Mike said.
Some of the findings of the research are:
*More than two fifths (42%) of business owners questioned said their company could only survive for a week or less without them.
*A similar proportion (43%) have a single major customer they couldn’t live without
*Over a third (36%) admit their biggest customer generates more than 40% of their monthly revenue.
To manage the risks, Mike is advising business owners to take a 2:2:2 approach to business planning post-Brexit.
He said: “Make the necessary adjustments to ensure you have a solid 2-week, 2-month and 2-year business plan.
“It’s imperative to find time to think as well as ‘do’. Business owners need to take time to look in the mirror and question what they are doing.
“Stop and think about your customers’ and suppliers’ financial stability – have you ever undertaken a credit check? Are they well-established leaders or are they lagging behind the competition and quickly losing market share?”
For many business owners, both their own and their family’s financial future will be determined by their company’s success, Mike said.
To see For Love Or Money report in full – visit:
Pictured above: Mike Lloyd, managing partner at Haines Watts Swindon