Strengthening your small business in tough times

There is no question that the UK recession continues to be felt and that there are very few businesses that aren’t being affected in some way.  Now more than ever as an owner of a small business or an entrepreneur considering starting out, you need to consider what steps to take to ensure your business is in a good position and fit state when the upturn comes.

Leigh-Ann Ogilvie, Director of The TrainingCompany, who works extensively with new and experienced owners of SMEs, delivering business skills training and consultancy, discusses the key areas that ensure businesses remain robust.

Cash is King

As an existing business owner, you will identify that there are a few basics to get right to ensure you have staying power, but first and foremost is cash.  Insufficient cash is the single biggest business killer. If you don’t have enough of it, and available when you need it, then it could be the end of your dreams.  Think about a detailed cash flow forecast as a priority; for example how much money do you estimate you business will receive over 6 or 12 months and how much will you pay out over this same period?  Will you have sufficient cash available to meet your overheads and keep going?  It sounds simple, but very few businesses actually think ahead and plan properly.  What is the best and worst case scenario - stress test the forecast to see what happens if ... Produce these forecasts in advance and produce them on a regular basis, monthly is good and quarterly is necessary.  If you don't have a bookkeeper or accountant, look at free forecasting tools online, there are some good ones available.

Get rid of non-essential costs

Where is your money going?  Carefully look at your spending and identify costs that you can take out of the business.  Be honest and be ruthless.  This is also an ideal opportunity to negotiate better prices or even just better terms. You can be sure that your best competitors are doing just this and you need to do the same. Leigh-Ann remembers and applauds one company we said, “We didn’t realise how much we were spending on window cleaning and photocopy hire, but having reviewed these costs and spoken with our suppliers we got an immediate reduction.” Small things add up.

A word of warning though, think carefully about making cuts when it comes to staff and marketing and seek advice.  Many businesses cut down their marketing activity, when they should be more actively promoting their business as the competition is at its fiercest. It is likely that are you will be one of the few and will have a better chance of getting your message out there and well received.  However, it is time to be focussed and targeted and ensure that you don’t waste money on the wrong messages or tactics.

Keep your skills alive

This may be the right time to brush up on your business skills.  Even if you are an experienced business owner, there is always a chance to learn.  Focus on things that will improve you as a strategist, a leader, a marketer, a financial manager or promoter of your business.  If you feel there are areas that you need to improve or need support in creating a new market, designing a product, managing people, there is training and coaching that will make you better in your business and give you the necessary outcomes to ensure you prepared when things improve.  www.trainingco.co.uk

Don’t be afraid to seek specialist support

Not many people are great at every facet of their business and sometimes the answer to a problem is simpler that it seems. Using a consultant with specialist skills that the business doesn’t have is a great way of getting a job done quickly and often cost effectively. Don’t be afraid to call on expert support for specific tasks.

Being a business owner is not an easy option and it takes a lot of courage and tenacity to keep going when times are tough.  The rewards are out there and for those who create solid foundations, ask for help and ensure that their skills are finely tuned, they will survive and thrive.