Steering your business through a downturn can be tough. But if you take advantage of all the help that’s at hand and try to follow some simple tips, it doesn’t have to be impossible.
Here’s our list of key tips to help your business weather difficult times:
Our business banking specialists work with a wide range of businesses, in different sectors, at different stages and in different situations. This range of experience means that whatever you’re dealing with, chances are we’ve seen it before, and can use that knowledge to help you.
But for us to really add value to your business, we need to know it as well as possible. Talk to us regularly, invite us round so we can see your business in action, let us know what’s going well and what’s not.
Call us now on 0800 601 601 or find your nearest business banking specialist.
We know you know it, but it’s a big one so we’re saying it again. Your cash cycle is the most important part of your business. Be proactive about collecting payments – consider offering prompt payment incentives, encourage debtors to pay online instead of by cheque, and chase up those who don’t pay on time.
You also need to be proactive about planning. Make sure your accounting is solid, keep track of costs and put money aside for taxes. Understand and plan for the peaks and troughs so that your cashflow remains constant throughout.
Is it just a bad time? Or is business just bad? How many customers do you have, and who are the best ones? When are the peaks and troughs in your business, and how do you deal with them? If something goes wrong, what’s your plan B? Who else knows about it? What happens when you’re not there? You should be able to answer all these questions and more to stay on top of things when times are tight.
During tough times, your customers are among your biggest assets. Knowing who they are, what they want and why they come to you, instead of going to your competitors, means you can make sure they keep coming back.
Identify and acknowledge your best customers, and consider rewarding them in ways that will keep them coming back, e.g. discount vouchers. Don’t be afraid to ask them for referrals.
Reach out to customers you haven’t seen for a while, and give them a reason to come back. And keep looking for new business – it’s always a good time to build your database!
Keep communication lines open with your employees. Together with your customers, they’ll play a key part in helping your business through a downturn. They’re your best source of information about what’s happening in the industry, and what the mood’s like within your company. Good employees will know when times are bad, and if you’re open and honest with them, will generally be willing to do what it takes to get the business through, especially if they’ve been looked after during good times.
To have confidence in your business and feel in control, you need to know how you’ll deal with the worst case scenario. Put some thought into how your business would cope with a long downturn, and whether there’s anything you can do now that could help long term.
Research shows that companies that continue to advertise during difficult times come out better off than those who don’t. If funds are tight, look for smarter ways to use your marketing budget, to get as much bang for your buck as possible, but don’t cut it altogether. Now is the time to get your name out there, especially if your competition has stopped advertising.
Look for ways to cut back costs without cutting back on quality. Streamline your processes, negotiate harder with suppliers, consider which advertising channels work best, and focus solely on those that perform. Keep a close eye on inventories – if items aren’t selling, consider discounting them – the most important thing is to keep the cash coming in.
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