Small Business Matters

Small businesses lack faith in upcoming Budget getting them through recession

In a recent survey that we conducted of our small business customers[1], a quarter of respondents said they fear that their business will go under if the economy doesn’t turn around in the next year.  This could have a devastating effect on Britain, as small businesses play such an integral role in the economy, employing an estimated 13.5 million people.[2]

Top Tips for recession survival – Part 2

With the current financial crisis set to continue, small businesses must consider how to survive a potentially long-lasting recession. Here is the second instalment (part one here) of top tips to successfully steer a business through the recession:

Slash the bills – Now is the time to shop around and check if your small business is paying over the odds on utilities bills. Energy Helpline is an independent price comparison service that can help small businesses find better energy packages.

How to manage cash flow

Cash is the oxygen for any business and so the saying ‘cash is king’ has never been as reinforced as it is during an economic downturn. With this in mind, the most basic but best business practice any entrepreneur can implement to ensure survival and even success through the downturn is maintaining a healthy cash flow. In fact, effective cash flow management can unlock capital, transform the bottom line and safeguard the business’ future in uncertain times.

Top tips on credit management – Part 2

As mentioned in a previous blog, good credit management is essential to any business and no company can afford to not take it seriously, especially when the availability of credit is tight. The final section of our basic principles of credit management is outlined below:

Ensure invoices are correct - A disputed invoice will not be paid so avoid giving the customer any excuse to contest the invoice. This requires accuracy such as clearly specifying the goods or services being paid for and being sure to quote the customer order number.

Top Tips for recession survival – Part 1

With the current financial crisis set to continue, small businesses must consider how to survive a potentially long-lasting recession. Here are some top tips to successfully steer a business through the recession:

Maintain healthy cash flow – By tracking what money is coming in and out, it is possible to manage cash to unlock capital and transform the bottom line in uncertain times. For more information, see the BERR guides on cash management.

Succeeding in the recession

In a global recession it seems surprising that anyone would want to set up their own business. Despite this, figures show that a downturn can encourage people to become entrepreneurs. A contributing factor is the increasing number of redundancies and lack of stability in the job market, as well as entrepreneurs looking for opportunities and taking a punt in a risky environment.

In contrast, between 10 and 30% of start-ups are likely to fail in their first year while more than 30,000 businesses are expected to go bust by the end of this year (BDO Stoy Hayward). This is almost a 50% increase on the 2008 figures, and has been attributed to a lack of financial awareness or accurate planning by many start-up owners.

Top tips on credit management – Part 1

Good credit management is essential to any business and no company can afford to not take it seriously, especially when the availability of credit is tight. Recession or no recession, any business can compete and even grow just by adhering to a few basic principles of credit management outlined below:

Get to know customers - Check the exact name and legal status of each customer and credit check new customers where possible. But do not simply rely on credit ratings, ask for references from other suppliers and assess the customer’s propensity to pay.