business downturn

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  Consider rework, outdated costly processes, customer payments for poor service and missed opportunity.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.