05March2024

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Businesses not Prepared for Big Freeze

DESPITE signs of yet another big freeze this winter, a worrying number of companies admit to being ill-prepared for the inevitable disruption it brings. The Close Business Barometer, a quarterly survey of small and medium-sized businesses across the UK, found that while more than half (58 per cent) are worried about the effects of more arctic weather this year, one in four don’t have a business continuity plan in place to deal with unfortunate, but common, consequences such as staff absenteeism and power failures.

The British Chambers of Commerce estimated that last year the economy lost £1.2bn a day due to the cold snap. Small and medium-sized businesses are most vulnerable and those that are already struggling because of the economic conditions may find that several days out of business due to extreme weather is the final straw.

David Thomson, Chief Executive of Close Invoice Finance who independently commissioned the survey said; “All too often people think about massive disasters when they talk about business continuity but in reality it’s the more mundane factors – like bad weather – that can impact us most of all.

“If businesses aren’t prepared for the worst,” warned Mr Thomson, “it can have a serious effect on cash flow which everyone knows is the lifeblood of all business. Prevention really is better than cure and I would urge SME owners who aren’t already prepared to act now, checking that premises are winter-proof, insurance is up to date and flexible working plans are in place in case staff can’t make it to work.”

For certain sectors of the economy, such as transport and logistics, there is of course no escaping the financial impact of the harsh weather, but Mr Thomson explains that with careful planning any disruption can be kept to a minimum.

“Our study revealed that eight in ten businesses operating in the transport and logistics industry are worried about the effects of another big freeze, substantially higher than the 58 per cent average across all business sectors,” he said. “Transport grinding to a halt is probably the single biggest economic blow when heavy snow hits the UK. For owners of logistics and haulage companies the cost of late deliveries, extra fuel charges, and honouring strict contracts with clients can put a devastating strain on financial resources.”

He added; “The key for getting through one of the worst winters we’ve seen for years is preparation. Failing to plan could have a serious impact on your business and result in it being unable to trade.

“My advice to businesses would be to have in place suitable funding arrangements to ride out any potential cash flow problems associated with the weather. Invoice finance is one option. It enables businesses to access cash immediately, easing any financial pressure and allowing companies to get on with what they do best - running their business.”

Source: closeinvoice - Businesses not Prepared for Big Freeze