The Ukraine Crisis Means Businesses Are Against The Ropes, But Here’s How To Avoid A Knock-Out Blow
By Helen Jude, Director and Head of Recovery and Valuation Services at Landwood Group
The nation’s businesses are facing truly torrid times at the moment.
First, the pandemic placed unprecedented pressures on them. Then from the autumn onwards, spiralling energy costs began to bite. And now the invasion of Ukraine has heaped even more uncertainty – interrupting supply lines and sending utility bills to new record highs.
These increased pressures come as businesses are now contending with the end of covid-related government support schemes.
It’s a combination that leaves many firms with few options, especially those that operate on narrow margins.
At Landwood Group we’re property and asset experts and as such have been seeing first-hand the impact spiralling costs are having on businesses.
“We’re currently advising one firm whose energy bills have gone from £13,000 to £52,000. Operating on a margin of under five per cent – a £40,000 leap in overheads overnight has had a very tangible and real effect on their ability to operate. And they’re not alone.”
Elsewhere in the property sector, the construction industry can expect further difficult times ahead as a result of potential interruption in the supply of timber – as much of it comes from north east European countries. This is in addition to general cost increases across the board.
For firms that produce technology, the supply of precious metals used in chips and batteries will take a hit too, while food producers will be forced to cope with increases in the price of wheat – of which Ukraine is a major global supplier.
For home-buyers, if continued inflation prompts the Bank Of England to raise interest rates then affordability starts to be put under pressure – leading to a potential slow-down.
So, in order to be in the best shape to navigate these difficult conditions there are some simple steps firms can take.
- As a priority – bring down costs associated with your premises.
- Review your energy supply and suppliers to ensure you’re getting the best deal. Businesses do not enjoy the protection of a consumer price cap – so it’s vital to shop around to find an energy contract that performs best for you.
- Look at the future of your premises – now, more than ever is a time to ensure they are as truly sustainable and energy efficient as they can be.
- This could mean installing solar panels, improving insulation and going from a conventional gas-powered heating system to using commercial heat exchangers.
- For tenants – demand to know from your landlord how they are planning to improve premises.
- Now is also the time to look at your financing – the cost of money is only going to increase so ask yourself are you borrowing appropriately? Are you leveraging your assets? At Landwood we are experts in just this field and are renowned for helping firms optimise their assets.
- For those with surplus assets, be that plant machinery or property, we offer expert appraisal, valuation and disposal – getting the best price – and freeing valuable cash that can go back into a business.
- And for those seeking to leverage and raise money against assets, we are committed to extracting maximum market value by providing expert insight into use, condition and repair.
- In the lettings sector, our stand-out director-led commercial advice both supports landlords in maximising yields from their buildings and helps tenants ensure they are getting the very best from their landlords.
- And for those who are seeking to rationalise their property holdings, we remain the leading nationwide property auction experts. We are the only auctioneers to hold sales on a weekly basis meaning the process of disposal is as efficient as possible.
Businesses may be down at the moment – but by taking the right steps you can ensure you won’t be out for the count.
We operate across the entire North West and beyond. For expert advice and to discover how our expertise can deliver you returns that can move the dial – call us now on 0161 710 2010.