S2 E9: Surviving and Thriving in troubled times with Kevin Engel of AWK Chartered Accountants

I'm delighted today to be joined by Kevin Engel of AWK Chartered Accountants.   Partial Transcript: Kevin:  I'm surprised at the number of businesses, some of them fairly significant in size, that don't really have a very good handle on their regular income and outgoings and you might expect it in the newer business, but like I said, there's some big businesses that don't, and that's because in good times, you don't necessarily need to because you look at the bank balance and it looks good. But the challenge, as you and I know, Dave, and we've spoken about many times, is, that very quickly evaporates when markets start to slow. Sometimes it's too late, because that bank balance erodes very quickly and you can build up liabilities and your sales dry up and before you know it, you can be in difficulty. So, yeah, the basic fundamentals of having a really good handle on income and expenditure, not just on a weekly and monthly basis, but on an annual basis, making sure that your working capital cycle, which is your short term cash cycle of your stock and your bank, and your debtors, less your current liabilities, your creditors really, that working capital cycle is properly managed because depending on the sector that you're in, you can very quickly run into difficulty with managing that sector, such as property and construction, which you and I know very well that working capital cycle could very quickly suck up any cash that you got and getting out of that hole can be quite difficult. So planning ahead for that, looking around the corners and making sure that you've got that really well nailed down is important and it's actually not that difficult to do. Dave: There's lots of amazing tech in there and it leads us nicely into the scenario we're in at the moment. The bank of England have kindly forecast, recession next year. Obviously, inflation rates are going through the roof. Ah, hiring people is a challenge and what have you. I've spoken to four business owners this week, three of them run on the face of a very successful businesses. they are great technicians and inside the walls of their office they're amazing. But outside the walls is little or no visibility. They're not promoting themselves, so they're not even promoting their core values and everything to allow not only just great clients to come in, but to promote hiring based on core values as well. So going into recession, I think it's really important as the market contracts, our visibility needs to increase so that we pull in the client work, the fee paying work, that we need to not just survive but thrive in a recession, which I genuinely believe is possible. You mentioned earlier on about the recessionary side of things when it comes to ensuring the business survives and thrives, have you got a few ideas that we could share with people listening to the podcast? Kevin: I'd be happy to share my thoughts. it's no Holy Grail, but glad to share what I'm talking to clients about now, given what I've seen in the past. So taking a couple of new clients over the last two weeks actually, who were looking for part time finance directors. In fairness to them, it was a move that they took, recognizing that we might be heading into tougher waters and actually bring somebody on board with financial experience might be a good move for them. But actually, and this is common with a lot of my clients, we actually spend not an awful lot of time talking about the numbers initially, because the starting point for every new client that I take on at the moment is how are we preparing for what could be choppy waters ahead, And that's about them understanding that there could be some fairly significant changes coming down the line. So the starting point is always, what does that mean for you? [email protected] www.linkedin.com/in/kevinengel [email protected]