Miracles can happen every day

You could be forgiven for thinking you need a miracle right now to manage your business finance, especially in the wake of such credit tightening and rising costs. However, what you may just need is some good old fashioned business advice. There are ways to protect your business from such economic changes. But to whom do you go?

It should be a company or a professional adviser who has been through a credit crunch before, and one who has thorough market knowledge and experience. Make the most of the systems and resources available to you, to give yourself as much room to manoeuvre .

Looking at business finance, planning, costs, marketing and your professional advisors, the following should help you on the road to beating this ‘squeeze’ and protect your business.

Plan ahead

It is vital that you have contingency plans in place so you are prepared for any kind of economic change. Plans should be considered for buoyant markets, downturns and also for when things are just 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. Small businesses tend to put such planning on the back burner; it can be seen as low priority in relation to making sales, purchasing stock, managing staff and all the general day to day tasks.

Financial flexibility

Arrange your financial affairs with more than one bank, so you do not have all your eggs in one basket’. You can have your current accounts, loans and overdrafts all with different institutions and your asset finance somewhere else – this will help maximise your finance options.

If one bank stops lending, you can go to the others, and if one is offering high rates, you have other options of where to go – choice in the market is what you need. You will have more negotiating power and maximum borrowing potential using this strategy.

Manage your costs

How often do you check your costs? What costs can or should you reduce? You may not think it is necessary – you have set up the best deals with all your suppliers, your marketing works for you and you may have a decent turnover, so if it is not broke, why fix it? Most businesses and the people that work in them are resistant to change; we can easily get caught in a ‘comfort zone’, we like things to be familiar. How successful do you want your business to be? Is it not worth trying something different, seeing if you can get a better deal elsewhere? When it comes to your finances and especially your loans; don’t overstretch your business - shop around until you are convinced you can ensure a healthy balance sheet.

Do not feel depressed

Go out and get more sales – the harder you try the luckier you get. How else can you increase your sales? If you work on the basis of anti-cyclical marketing, it means that when times get tough, you have to do everything you can to win more business, focus on key clients, you don’t have to spend more money.