Creative businesses unprepared for Euro woes
Posted by: John Toppin - Nomizon Associates
Date added: Tue 20 Dec 2011
There is no escape from the Euro in the news. Politicians in the Eurozone are still faffing around. If the Euro collapses, commentators say that it will devalue. It could become Euro A (strong countries- Germany +) and Euro B (weak countries), or countries could revert to their previous currencies.
It is time for you to consider what the impact might be on your business and to start taking preventative measures....remember your "if onlys" when the banks got into trouble only a couple of years ago.
If your business is just dealing with UK clients and suppliers don't think that it will not impact you because many of your clients and suppliers will be exposed...so you will be too.
Some of what to consider for your business:
- Assess where your business is most at risk, plan for it and implement.
- Maintain as little cash as possible in your Euro denominated bank accounts.
- Collect from clients you invoice in Euros as quickly as you can - better still bill them in Sterling.
- If you are drawing up new contracts with Eurozone clients insist on Sterling.
- If you have subsidiaries in the Eurozone, repatriate profits back into the UK where you can.
- Talk to your bank manager about hedging.
Whatever you decide to do, make sure you will have no Euro regrets in 2012.
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