It's not all Doom and Gloom
Are we in a recession or not?
Does it really matter?
It is more what we do that counts - businesses need to be active rather than reactive.
There is a need to identify what contracts will continue regardless of the current economic situation and assess how they can be fulfilled more efficiently. Is there a need to invest in new technology or have staff up-skilled? Are there any government incentives which can be taken advantage of? Can you extend the terms of your accounts, delaying payment without penalty and thereby improving your cash flow?
Look at your current clients. Are there any that you may loose as a result of the current situation? What effect will this have on your cash flow? Is there anything you can do to assist them to ensure their viability and thus their continued custom?
What about strategic alliances? Take the lead. Are there any alliances you can be a catalyst for?
There is the saying that "blood is thicker"; relating this to business, "relationships count". It is important to maintain existing business relationships and develop new relationships. Chambers of Commerce and Business Networks are a good way of cementing relationships. People prefer to do business with people they know and trust. And don't be afraid to establish a strategic relationship with your competition, for you never know. You may be able to develop a cooperative to increase your purchasing power or even share staff or sub-contract during peaks and troughs of the business cycle.
If you get into difficulty don't hide under a rock and hope it will go away - chances are it won't. If you are having trouble meeting payments, approach the creditor with a suggested payment plan. They would rather you make some payment than you go bankrupt in which case they would receive little or nothing that is owed to them.
The Tax Office is the same - there are people there to help you. You may have to pay interest on a taxation payment scheme, but this is better than paying interest and a fine if you don't communicate with them
This is not a time to stop actively promoting your businesses. You not only have to keep your existing clients, but you also need to keep the good image of your business out there. When business does start to pick up, you want potential clients to know about your service. You never know when they will start looking. When the economic situation is in a downturn, some businesses decrease or drop marketing and advertising saying they cannot afford it when in reality you cannot afford not to. This is a good time to negotiate good deals on advertising rates and marketing material.
When times are tough we appreciate a "sense of community", and those who give to their community are often rewarded with increased business. It is known as reciprocity. Big businesses do it by sponsoring major sporting teams or helicopters to transport sick children. Smaller businesses can do it by sponsoring local sporting clubs or getting involved with local schools. This may be at no cash outlay to your business, just some of your time.
Try to remain positive. The economy follows a cycle and after every downturn there is always an upturn. Will you be ready to ride the up wave of business activity?
For information on how you or your business can assist local youth with their transition through school to further education and/or work, contact your Local Community Partnership.
Stephen Frost, Managing Director - BREEDGWP Magazine Issue #25, July-August 2009
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