Identify potential cashflow problems

How changing market conditions can affect your business


In order to identify and deal with any potential problems, you should always be aware of any outside developments and market conditions that could affect your business, and, if necessary, be ready to respond and change your plans quickly.

You should always be aware of:

  • Interest and exchange rates - these can have an influence on the general trading climate and are not just a matter of direct costs. For example, interest rates may affect certain industries more than others and at different times, and foreign exchange rates could affect how easy or profitable it is to do business with another country.
  • Your competitors - both existing ones and new ones, and what their strengths and weaknesses are.
  • New technologies and innovations that could change the market and increase or reduce the demand for your existing product or service.

All businesses experience changes in the general sales environment at some point. These changes could affect the entire economy - such as a recession or economic downturn - or they might only affect a specific industry or sector. It is important to be alert to possible changes and amend your forecasts and plans to compensate for them in order to avoid potential cashflow problems.