Top Tips For Small Businesses To Survive The Credit Crunch

Written by on August 26, 2008
Categories: Business Funding, Success Thinking

Posted by: Paul Stanford

 

 

Tips to survive the “credit crunch”

 

 

One of the key questions I get asked lately when seeing businesses is what to do about the “credit crunch”. Well here I have put down a few tips of how to keep afloat and ride out the storm. Remember that business activity is always cyclical so if you can survive the downturn then you will be able to take full advantage when the economy swings back up again.

 

 

·         Remember – your business needs to have enough cash to survive. Businesses go bust because they run out of cash and not because they are unprofitable

·         Reduce your overheads where possible. This can involve taking some difficult decisions such as reducing staff (usually your biggest overhead)

·         Sell off any hard to shift stock or underutilised plant. Forget what they may have originally been worth or what you may have paid for them – it’s what they are worth now that is important. So sell them for what you can now as they will be worth less later

·         Shop around for the best deals from suppliers and utility companies

·         Chase up any unpaid invoices. Remember it’s not a sale until the bill had been paid!

·         Write a cash flow forecast with a month by month breakdown of target income and budget expenditure. Do this for at least 12 months. It will help provide a direction and benchmark….and also the lowest (most critical) month for cash flow

·         Try and raise your overdraft rather than take out a loan as you only pay for the what you use of the overdraft

·         Keep marketing! Remember it is easier to sell to your existing clients than find new ones. So keep up with the newsletters, promotions, special offers, loyalty schemes and refer a friend schemes

 

 

Remember to focus on having enough cash and you will be a survivor turned predator when the economic cycle turns from bearish to bullish.

 

Paul Stanford is a Director of 4Momentum http://www.4momentum.co.uk. 4Momentum provides business advisory services to small businesses, charities and social enterprises primarily in Sussex. Services include advice on starting a business, growing and transforming a business and selling a business. Clients typically contract 4Momentum for short periods of an hour to long term consultancy over many months for advice on subjects such as mentoring, business planning, sales and marketing advice, bidding for contracts, raising finance and general business advice. Paul is approved by the UK Government to deliver business advice on their behalf through Business Link and is a member of the Institute of Business Consultants. Visit his blog at http://www.paulstanford.co.uk/blog

Copyright 2008 Paul Stanford

 

 

 

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