John Wright, Chairman, Federation of Small Businesses gives his Top Tips to beat the crunch
Top Five Tips to Beat the Crunch
By John Wright, Chairman, Federation of Small Businesses
The rocky road of rising mortgages, fuel and living costs are overshadowing small businesses in this economic downturn. Times are tough for small businesses that are facing big challenges in the economic climate with credit drying up, larger companies delaying bill payments and lack of consumer spending power. However, the Federation of Small Businesses and one of its service providers, ASC Finance for Business have got five top tips to help your business avoid and survive a credit crunch.
Be financial flexible
Arrange your finances with more than one bank so you don’t have all your ‘eggs in one basket.’ Relationships with your bank can’t be depended on so have your current accounts, loans and overdrafts all with different institutions and your asset finance somewhere else. Keep an eye out for better rates elsewhere. This will help maximise your finance options. Avoid getting caught in a comfort zone.
Focus on your USPs (unique selling points)
Look at what sets you apart from your competition and maximise your strengths. Focus on key clients to win more business. You don’t have to spend more money, but when times get tough you have to do everything you can to win more business. Be creative and focus on what you do best and use your USBs to diversify your opportunities.
Plan ahead
Failing to plan is planning to fail! Contingency plans are vital to prepare you for any kind of economic change. Plan for buoyant markets, downturns and for the plain average. Using this philosophy, you should have no need to panic in times of change and your business should remain more stable and continue to grow. Although you may be busy keeping your business running, it is important that when tough times occur you have a plan of action and the right systems in place to keep your business going. Also, prepare for the short term, mid term and long-term, and build in flexibility with whatever you plan.
Manage your costs
Avoid getting caught in a comfort zone. Keep an eye on your costs and assess if anything can be reduced or if you can find better deals with your suppliers elsewhere. Don’t be afraid of change; shop around until you’re happy that you can ensure a healthy balance sheet.
Don’t be afraid to ask for help – there is no such thing as a silly question
Remember you’re not alone. Don’t be afraid to ask for help and advice from friends and family and make use of your lawyers and accountants. Different markets present different opportunities and changing markets will always cause a shift. Just don’t wait until the last minute for advice.
The FSB provides business loans, banking, insurance and a legal helpline for its members with advice on taxation matters, employment law and commercial and business legislation. These services are vital to help you make the most of your business and get it through this tricky period.
Editorial Contacts
Andrew Scales, Porter Novelli
020 7853 2208
