23 Nov 15 ways to survive a business downturn
While retail businesses revel in Christmas holiday spirit and spending, many other industries experience a business downturn over the holiday season.
Here are some tips to help you manage your business during the quiet times.
1. Reduce Office Space
How much office space do you really need? Can you afford to reduce or sublet your space? Talk to your landlord to see if you can negotiate a better deal on your rent.
2. Evaluate Revenue Streams
Do some research and evaluation to understand which products make or cost you money.
3. Separate Good Costs from Bad Costs
Good costs are those which support your business to achieve its strategic objectives. Bad costs are those that can be avoided or reduced. Consider rework, outdated costly processes, customer payments for poor service and missed opportunity.
4. Embrace Technology
With so much software available today, there are many ways to automate processes and increase efficiencies from accounting, marketing communications, payroll and web hosting to name a few.
5. Outsource To Experts
What do you spend a lot of time on that you could take of your plate? Don’t spend time on finances when it is a struggle, outsource it to an expert who will perform the task efficiently.
6. Review Operational Expenses
Comb through your business expenses and find out what’s increased and why.
7. Negotiate With Suppliers
Shop around for better deals on utilities, negotiate volume discounts and better payment terms. Establish if a low price alternative can be used. Consolidate purchasing with fewer suppliers to get better discounts and build strong relationships.
8. Reduce Holiday Leave Accruals
Encourage staff to take leave during the quiet times.
9. Reduce Over Capacity
Evaluate your business assets and investigate:
- unused phone lines
- equipment left on overnight
- consider timers on after hour lighting
10. Work on Outstanding Debts
Consider a discount for clients to pay their bills on time.
11. Review Financial Costs With Your Bank
Talk to your bank to see if you can reduce interest and fees during the business downturn period.
12. Cut Communication, Travel & Postage Costs
- Use email to send out invoices and statements
- Make video calls via free services such as Skype
- Attend meetings where your physical presence can make a difference to your business
13. Make Sure Staff Work Efficiently
Help your staff to perform at their best.
- Revisit job descriptions and remove ambiguity
- Introduce and measure KPIs so your staff know what you really need them to do
14. Separate Personal Finance from Business Finance
It is important for any business owner to have a clear understanding of their profit and loss statement and cashflow position, particularly when business is slow.
- Review your profit and loss and make sure the only expenses are true business expenses.
- Consider your future liabilities, such as GST, and avoid dipping into money you will have to pay back later.
15. Sell and Lease Back
Find ways to release cash. For example, rather than pay upfront for software, can you pay monthly to generate short-term cash flow?
Contact us on 1300 552 763 to discuss how Smart Advantage can help your business navigate a business downturn.