Keys to preparing your company
It seems there is agreement among international institutions regarding the exhaustion or end of the economic cycle that began in 2014. Undoubtedly, several factors could dampen economic activity; probably the most significant are, on the one hand, the trade war initiated by the US, and on the other, a hard Brexit.
There also appears to be a consensus that the political paralysis in Spain is not helping to improve this situation. This month, the ECB called on governments to implement economic policies aimed at mitigating the decline in activity, something incompatible with this country's extended budget.
The economic growth forecasts for Spain from 2019 to 2021 are: (source FUNCAS)
- Gross Domestic Product: 2.2%, 2.0% and 1.8% respectively.
- Private consumption: 1.9%, 10.7% and 1.4%.
- Construction: 5.6%, 4.0% and 3.0%
- Unemployment rate: 13.7%, 12.4% and 11.5%
The slowdown appears likely to be significant, although growth would still allow for job creation.
From our position as consultants and entrepreneurs, we dare to suggest:
- Regarding clients: Tighten credit approval criteria and, where possible, transfer the risk to financial institutions (request payment via confirming) or insurers (credit insurance policy). Claims for outstanding payments should be made as soon as possible; we know that time is of the essence in recovering a debt. At MGI Ambit, we have a specific service for this.
- Regarding debt: Avoid increasing bank debt and, if necessary, restructure it, transferring it from short-term (credit lines or discounted notes) to long-term (3-5 year loans). Our consultants can review your balance sheet.
- Regarding investments: Study new projects with the utmost objectivity; enthusiasm too often makes them seem good. We can help you with a review of your business plans.
- Regarding personnel: be very cautious with converting contracts to permanent ones, or with new hires. Employment is a desirable goal for our society, but it must be achievable. Our employment consultants are at your service.
And in general, constantly talking to the market, anticipating events is the best strategy, always accompanied by reliable professionals, such as those at MGI Ambit.
Do you have any questions about this topic?
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A graduate in Economics from the University of Barcelona, he is also a Certified Actuary, Real Estate Agent, and Insurance Broker.
He furthered his training with courses in taxation, business valuation, and credit management offered by the College of Economists of Catalonia and the Center for Financial Studies (CEF).
In 2000, he became the managing partner of the firm, and since 2011, he has also been responsible for the Finance Department.
For five years, while already a member of the management team at Àmbit Assessor, he also held the positions of Deputy General Manager and Finance Director at Alco Grupo Empresarial.
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