Beat the credit crunch: survival tips for small businesses...

Hello everyone

The credit crunch in the UK sees banks tightening the reigns on lending to small businesses. Those small businesses, who are viewed as risky investments by banks even in boom times, will now find it harder than ever to secure loans.

There are a number of ways in which small businesses can prepare for a financial downturn. Here are a few simple steps you can take to help weather the storm:

Review your current bank
Your bank will play a key role in your credit crunch survival, so it’s important to know you’re getting the best deal for your business. If you are considering switching accounts to a new bank, thoroughly investigate your options. Compare the various deals, and be sure to pay attention to the fine print – watch for hidden charges and any clauses which may affect your interest rate.

Get tough on accounts owing
During a recession it is important to ensure your client accounts are paid on time. Larger clients will be adopting their own strategies to retain funds, so may be paying even later than usual. Don’t be afraid to get tough, a good client will understand that you’ve got a business to run too, and that receiving payments is an essential part of maintaining a steady cash flow.

Try to keep staff costs down
Paying employees is an unavoidable cost in most businesses, but some careful consideration of how this money is spent can go a long way. Before recruiting new staff members, evaluate whether existing staff could fill this gap or if the necessary tasks can be fulfilled by using the services of a Virtual Assistant. If new staff must be employed, ensure this recruitment is effective. Recruiting can be an expensive procedure, so it’s important to get it right the first time.

I hope this is useful

Thanks
Clare

Cheap Broadband and Telephone for Small Businesses http://www.xlntelecom.co.uk/

Re : Beat the credit crunch: survival tips for small businesses

Thanks for the tips Clare

Re : Beat the credit crunch: survival tips for small businesses

Thanks for the information this is really very helpful for every person and for me also
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Re : Beat the credit crunch: survival tips for small businesses

I am sure that most of you that run small businesses in the UK that our mate G Brown and his merry men (sorry women) are about to help you to sink even more from April 5 2009, that's cheering news yes?
Yes that stupid lot are to put your department store tax's up by a massive 5%, that should help you to decide to close your shop if trade is lower than last year.
O yes another thing to help us hard done by shop owners is that the number 10 tribe are to make more laws to force you to give your staff much more time off work, so you can take on another person to help you fill your opening hours.
Yes even more good news to help you sink, if people buy a large order from you, and they want it on tick, HP, or whatever and they run a dept up to say £15,000 in goods, and they have no intention to ever pay you for it, the NO 10 tribe are to order you to wipe the dept off because it makes the lady who had the good depressed and very very upset, o yes and sad.
So that is Gordon's tips for you to help you keep your shop going, and he will be, sorry the Job Centre staff will be awaiting you when you sling in the towel, and admit defeat, and wonder why you bothered to even start your business in the first place.
O what fun, the UK is so kind to us.
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Re : Beat the credit crunch: survival tips for small businesses

Thanks for the tips. Made a good read.
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Re : Beat the credit crunch: survival tips for small businesses

Apparently Gordon is now the world's hero, after G20 summit, or at least he thinks so!

Re : Beat the credit crunch: survival tips for small businesses

Yes trying to get debtors to pay on time matters for cashflow and maybe changing one's bank can too, if in the unlikely event one can be found at the moment which is prepared to take on a new small business client. Evaluating staff also matters but so does evaluating everything else at times like these.

What is really important is to first take the knife to all of your overheads; sweat your fixed assets to avoid new investment; screw better prices out of suppliers to improve or at least maintain margins and run thorough checks on clients to make sure that none of them are going to go down anytime soon.

Once you have done these things you must then check that you have done enough to ensure success next year or if not success; at least survival. That takes planning and forecasting your cashflow above everything else. You can do that by following the link below. It's free by the way:

http://www.figurewizard.com/cashflow_calculator.php
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Re : Beat the credit crunch: survival tips for small businesses

Actually getting companies who are not interested in paying to pay is really, really hard. As soon as those emails and phone calls start getting returned, the warning signs are there... moving from that step to getting paid without having to get tough is very tricky.

Re : Beat the credit crunch: survival tips for small businesses

I read that the sole reason 30% of small businesses fail is down to not getting paid... incredible when you think about it!