Top 10 Tips for Surviving the Crunch

"According to the British Chambers of Commerce, 75% of small businesses are concerned about the economy, but few have plans in place to protect their business."

1. Mind Your Cash Flow - Issue invoices promptly and chase up debtors; don't buy more stock than you need; negotiate longer credit terms with suppliers, shorter ones for customers; fill up gaps in your forward order book; and keep in touch with your bank.
2. Cut Your Costs - Look for saving in every part of your business.  Do you turn equipment off at night? Is every business journey necessary? Are you taking full advantage of your tax allowances?
3. Credit Check New Customers - It may take only one major customer to go bust to jeopardise your business.  Protect yourself by conducting rigorous credit checks on new customers and agreeing clear credit terms up front.
4. Focus on Retaining Customers - When finances are uncertain, consumers cut their discretionary spending - so do all you can to keep your customers coming through your doors.  Loyalty schemes, small discounts and regular communication are just three ways of letting your customers know you value them.
5. Provide Outstanding Customer Service - Consumers appreciate businesses that give them more for their money, especially when times are tough.  Efficient service, fast delivery, flexible payment terms, and so on, can persuade people to spend with you rather than a competitor.
6. Increase Your Marketing - When competing for a smaller pot of money, it becomes more important than ever to tell people why they should come to you.  You don't have to break the bank, but be sure to shout about your business.
7. Concentrate on Products and Services that Sell - Don't put your efforts into trying to sell things that are untried or that few people wil buy; stick to profitable favourites.  Don't be tempted to slash prices either - if demand for your offer is not price sensitive you will be giving your profits away.
8. Avoid Borrowing - Bear in mind loans may be more difficult to obtain and more expensive in a slump.  Alternatives include invoice financing, which releases up to 85% of cash tied up in unpaid invoices.  Better still, save money by cutting costs.
9. Streamline Your Operation - Consider moving to smaller premises, or subletting your existing space.  Sell off excess equipment and look at staffing - are your people concentrated in the right areas?  Will flexible working be more cost efficient? If considering redundancies, remember that it's bad for morale and replacements may be hard to find when business picks up.
10. Sell Online - An online sales or marketing channel will expose you to a larger marketplace for minimal cost.  Plan and resource online selling properly, including providing payment security, attracting visitors and meeting orders swiftly.

This information was kindly provided by Business Link.