2013 is the Chinese Year of the Snake and could herald potential hazards for businesses and investors alike. Despite the global recession and the double dip experienced in the UK, 2012 did not experience the crash many economists feared. Government intervention and money printing by the major central banks has helped to shore up underperforming businesses (mainly banks) and restored business confidence.
Many people are now beginning to wonder whether the huge crash we were expecting will be avoided. However we would issue caution during the year of the snake. Expect the unexpected to strike at any time. Do not expect the stability of 2012 to persist in 2013. The Eurozone crisis is still very real with even Germany reporting a slowdown in its economy. Fears over a Greek default remain a major issue and the US have yet to resolve their “fiscal cliff”. The UK is increasingly coming under the spotlight and could well lose its coveted AAA rating this year. Any one of these issues could spark a major global recession.
Basic economic theory suggests that we require a bust before we can experience a proper recovery. 2013 has begun with several major retailers falling into administration including HMV, Comet, and Blockbusters. Wine merchant Majestic Wine is the latest company in the news to be experiencing financial difficulty.
UK businesses are placing greater emphasis on monitoring their cash flow and repaying their debt. Well managed businesses will survive the downturn and are likely to be well positioned to benefit from the opportunities that will arise during the inevitable recovery. Obtaining sound financial and commercial advice is critical to the success of a business. Belsize Accountancy are experts in advising small businesses to strengthen their financial controls together with budget and cash flow forecasting procedures. Feel free to contact us for a free quote. We do not charge for introductory visits.