Member Article

Don’t let optimism lead to post-Covid over-trading

PANDEMIC restrictions are easing, workplaces are opening up again, there’s an atmosphere of optimism…so what could possible go wrong?

Sheffield financial expert Deborah Lockwood has warned that the enthusiasm for a return to post Covid-19 way of conducting business could cause a problem.

For while the economy may be showing signs of recovery, Deborah says there are dangers in taking a too enthusiastic approach to getting back to business as usual.

“It’s not a case of being pessimistic when all the signs of recovery are so encouraging,” said Deborah, a director of Sheffield business turnaround and insolvency practice Graywoods.

“It is, however, very much a case of thinking carefully about the future after more than a year of crisis for many businesses and not falling into the trap of running before you can walk.

“The advice, quite simply is not to do too much too soon, especially as the true cost of the pandemic is only now beginning to emerge, with latest figures for England and Wales showing a month on month rise from 685 to 992 corporate insolvency cases.”

Those numbers, she added, could be made worse if companies attempted to compensate for the past year by over-trading, pushing themselves to succeed beyond realistic expectations.

“Of course there are many reasons for optimism but if cashflow has been affected by the pandemic, it’s not going to be so easy to simply pick things up and move forward.

“Look very closely at where your business is now rather than thinking of the way things were and if there are issues to be addressed, do that straight away rather than assuming that pushing for success and over-trading will cover over the cracks.”

This was posted in Bdaily's Members' News section by John Highfield .