Tips for Surviving Tough Economic Conditions

Whilst much has been made in the press about the difficulties of starting a small business in the current economic climate, there has not been as much focus on the serious issues faced by business owners trying to keep their heads above water during the recession. By following a few simple tips, however, you can ride out the storm and end up with a more efficient business.

Analyse Your Situation

In any economic crisis, knowledge is power. For that reason, it is vital that you conduct a thorough analysis of your current situation. Not only should you have an up to date budget and cashflow plan, but you should also be looking more widely at the overall economic situation in your sector. How are other companies like yours doing? Are there any trends which you can identify, and are other business owners taking particular steps to deal with them? There is nothing wrong with having a different strategy, but you should at least be aware of what your competitors are doing, and why.

Cut Out Needless Expenditure

Having analysed your current situation, you should move to identify and eliminate any needless expenditure. You should look at the entire business, from sourcing products to chasing up invoices, and cut out any process which doesn’t seem absolutely necessary. Of course, when you are doing this, you should be consulting with your employees and your customers. The people closest to the process will understand why a particular step is in place, and the full consequences of removing it. Once you have made a decision, however, be ruthless. You need to cut costs, and the health of your business will depend on it. This may also involve merging the functions performed by staff, and investing in additional training in order to save money in the long-term.

Bring In Additional Finance

Needless to say, the flipside of cutting costs is bringing in additional finance. This may be particularly needed if you have not been able to identify obvious ways to make your commercial operation leaner whilst preserving your effectiveness. If you are having commercial problems, you may find it difficult to secure traditional loans from banks, but there are a number of other options available to you. As well as a personal injection of funds from friends and family, you should also investigate the possibility of releasing cash from any assets owned by the business, as well as leveraging your existing orders book through an invoice financing agency.

Don’t Panic!

Above all, those businesses which survive the current economic crisis will be those which keep their heads, control their costs, and have a clear strategy for customer retention. Economic activity is still going on, and in order to capture your share of it you will need to provide a service to which customers wish to return again and again. If you can build a reputation for excellent quality, your business can thrive and end up in an excellent strategic position for any economic recovery.

We can offer you financial solutions to help keep your cashflow healthy. Request a quote now to find out how much invoice finance can save you.

Back to top