West Midlands are the most likely to be struggling with cashflow
New data from HR, payroll and finance experts MHR reveals that businesses within the West Midlands are among the hardest hit when it comes to cashflow issues.
MHR surveyed over 500 senior managers in large organisations across the UK as part of its Business Resilience Report to find out their views on business resilience and the future of their organisations.
Nearly a quarter of business owners (22%) in the West Midlands said their organisation did not have sufficient cashflow to cover unexpected events over the past five years, the highest of any region. In comparison, only 16% of businesses in the South West, 13% of Scottish organisations and 11% of companies in Northern Ireland also said they did not have sufficient cash flow. Conversely, 93% of London businesses, 96% of South Eastern businesses, and all (100%) of North East businesses surveyed said they had sufficient cash flow.
Furthermore, out of those who have not had sufficient cash flow to cover unexpected events in the past five years, 20% of businesses in the West Midlands have had to reach out for external assistance or loans, with a further 60% planning to do so.
When asked about their organisation’s ability to withstand non-routine disruptive events, 4% of West Midlands respondents said that they did not believe their organisation would be able to cope with it, compared to less than 1% of organisations across the UK and Ireland overall.
Similarly, 16% of organisations in both the West Midlands and the South Western regions both felt that they did not have financial capacity to support operational change, the lowest ranking regions within this survey.
But while 75% of respondents in the West Midlands claim that business resilience is more important now than 5 years ago, almost 1 in 5 (18%) of these businesses have not made any significant changes over the last 5 years to increase their business resilience.
Mark Jenkins, CFO at MHR said: “A lack of cashflow in regions outside of London can be extremely detrimental to local economies. With a backdrop of market volatility, black swan events, and a potential recession on the horizon, investing in business resiliency and getting financial forecasting right has never been more important.
“While there is an understanding that business resiliency is a growing priority, this urgency needs to be converted into action. Be it investment into the technology to implement planning and analysis to prepare for the future, or focusing on the skills needed to get businesses back in black, there are plenty of ways to work towards greater resiliency, confidence, and a sense of security ahead of any disruption that could be around the corner.”