Business Survival Tips

Business Survival Tips

10 TIPS FOR YOUR BUSINESS    TO SURVIVE A RECESSION OR A CREDIT CRUNCH

1.    Prepare or update your business plan
All business owners/managers need to understand where they make or lose money and need to foresee the impact on the business of different scenarios occurring, i.e. drop in sales, an increase in interest rates or the level of bank funding being restricted
 
2.    Maintain up to date Management Accounts
If you have a business plan and you should have one, then you need to maintain up to date financials, i.e. management accounts so that you can measure the performance of the business against your business plan and take action if you are deviating from the plan

3.    Cut costs as soon as you can
It is important to act fast if turnover and profits are dropping and you need to make decisions in relation to which costs you need to adjust. A lot of businesses have left it too late and their cash reserves are now depleted

4.    Cashflow is King!
This is critical in a recession and even more so in a Credit Crunch as your business can not rely on normal bank lending to plug the gaps. You should keep a tight control over your credit terms and ensure that payments are received on time. You should also ensure that you aren’t carrying excess stock or have idle assets that could otherwise be turned into cash. You should try and negotiate extended credit terms with your suppliers and pay Revenue on a monthly basis rather than looking for the lump sum when the returns are being filed.

5.    Check your terms of credit
If you give credit to your customers remember they may not be able to pay or may be insolvent but when you find this out it maybe too late. Make sure your terms of credit cover you regarding late payment interest, termination of contracts and retention of title to the goods.
You should also do credit checks on large customers by using the services of Vision-net or Solocheck.

6.    Take your chances
In a recession or credit crunch some businesses will fail, however, others will be well positioned to take the opportunity to buy these businesses or take over their customers, so be ready to take your chances!

7.    Buy assets or take security
If you own a limited company and you are personally considering putting your own funds or pledging your personal assets as additional security to resolve an issue with a creditor such as the Revenue or with the Bank, you should seek expert advice before doing so to ensure that this is the best course of action for you and the company

8.    Be able to stand over your decisions
This is particularly relevant to company directors where the company is insolvent, you need to be able to justify your decisions, as in such circumstances there may be legal implications for you personally – you should seek expert advice if in doubt

9.    Remain in control
Where your company is insolvent and under pressure from creditors including banks it is important that you do not allow them to dictate to you how you should run the business and/or resolve the situation. You will find yourself immersed in the problem and not given the time to step back from the problem and assess the options, that’s where an independent expert can help – don’t leave it too late, get help early

10.     Don’t suffer sleepless nights
You shouldn’t have sleepless nights about your business, this will affect your physical and mental health and could also affect your relationship with your family & friends.
Get held and advice from your Accountant, Solicitor and financial advisor and if necessary seek out an Insolvency Expert

 

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Contact Sigma Services


Sigma Services
17, South Bank, Crosses Green,
Cork, Ireland

T: +353 21 4311885