Refer-Online

ENSURE CASH FLOW
Prepare cashflow projections for at least a year ahead based on current and worst future case scenario.

REMAIN FRIENDLY WITH YOUR BANK MANAGER
Tell him or her, how things are going and discuss arrangements for a possible downturn. If you need more money borrow on the long term not short term. There is nothing worst than ringing up in a panic for an emergency loan or overdraft. Talk to a good independent business finance broker. They can often help when your bank can't.

REVISE FINANCIAL FORECASTS
Look critically at projections and make sure they are appropriate for the conditions.

PRUNE ROUTINE EXPENSES
Things that are not essential for bringing in business. Lease equipment and buy second hand.

DON'T PANIC
It is essential to continue to invest in the future, but be selective. Finance developments in your core money-making activity and slow down on peripheral activities.

DON'T CUT BACK ON MARKETING
In bad times marketing is even more essential, so long as it's selective.

PRUNE UNNECESSARY STOCK
Don't tie up capital in superfluous stock - reduce to realistic levels and return surpluses to suppliers were you can.

DON'T CUT TRAINING
Small companies think this is an obvious way to save money, but it should only be done as a last resort. You will regret it in the long run.

TIGHTEN UP CREDIT CONTROL
Debts can be the death of a small business and even more so in a recession. Larger customers will use you for free credit by holding out on payment if they can. Consider factoring to free up cash it is a better long term option than an overdraft.

DEVELOP A RECESSION-PROOF STRATEGY
Take advice the moment things start to go wrong - don't just hang on and hope for the best. There are support agencies like Business Link that offer free advice.
Get the right balance of funding which can include risk capital and long term loans for the lean times. Overdrafts should only be short term solutions.
• Keep up with market changes as conditions alter.
• Adjust product and service prices as recession grips and eases.
• Continue to consult and amend your anti recession plan.
• Keep revising your worst case scenario and how you would cope with it.
• Even in a recession led environment, take a long-term view on borrowing, reinvestment, product evolvements and staff development.