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In my previous post, I touched on client concentration and the risk that an agency faces when a client makes up over 15% of revenue.
It is widely accepted that a client making up 15% or more of your total revenue is risky.
The Autumn Statement went as expected with the main changes being the tax-free allowances, exemptions and tax thresholds reduced or frozen.
Many agencies are looking to do more international business to mitigate the impact of the UK recession.
With the pound struggling against other major currencies, I thought I would outline how I see it affecting UK agency and consultancy businesses.
As expected, all recent increases and planned increases to tax and national insurance have been reversed but there were a couple of surprise announcements from the mini-budget today.
Under plans set by Rishi Sunak as Chancellor, corporate tax was to move from a single rate of 19% to effectively three different rates dependent on the taxable profits made from April 2023 (as much as 26.5% for profits made between £50,000 and no more than £250,000).
Lock-up is the value of revenue that has been earned but has not yet been converted to cash as it is either tied up (or locked up) in unbilled work in progress or outstanding trade debtors.
A downturn is predicted from some point in Q4 this year but with the right planning, agencies can survive and even flourish! It’s important to review your client portfolio to identify where there could be risk and opportunity.