Its now a blatant fact that the British Economy is in a downturn and Company Directors interested in their Companies existence must have a plan or they will most certainly go into administration
A record number of companies and shops went into administration over the Christmas period caused by the really awful trading conditions.
Retailers and Businesses that have already been bore the brunt of the recession and have had to go bankrupt are MFI the furniture retailer, Whittard of Chelsea, the specialist tea and coffee retailer. and Wedgewood the fine China and tableware manufacturer.
Possible one of the most high profile causalities of the economic collapse has been woolworths that went into administration in December 2007 and finally closed all retail outlets in January which has put 27,000 out of work.
How can a business survive this recession? Well Alan Tilley of the Turnaround Management Association says that for a business to achieve a successful turnaround it needs four things; a viable business core, credible management team, a valid business plan and appropriate finance.
British Business is now facing a Cash Flow pinch caused by the credit crunch and and freeze in the capital markets forcing Companies to search out unconventional methods of finance
As a business owner one of the first things you should do to survive a economic downturn is cut costs. Carefully review expenditure to identify any areas of your business where savings can be made. Look at transport costs, advertising, marketing, business location and even the simplest things such as turning off the office lights at the end of the working day. Simple measures can give rise to immediate benefits for little or no pain.
Business owners interested in surviving a recession should look for alternative and appropriate sources of finance. The old clich of cash is king has never been more important than at the present time, although most businesses nowadays rely on some form of third party funding whether it be bank overdraft or business loans. Now may be the time to consider alternative forms of funding such as invoice factoring, which is increasingly popular for small to medium businesses. While not suitable for all businesses, the huge benefit of invoice factoring is that rather than have money tied up in invoices that are yet to be paid, you can receive an initial payment up front, typically 80% – 85% of the gross value, and the remainder when the customer pays the invoices to an invoice factoring provider, less the service fee which has been negotiated with them. However, if the customer defaults on payment, then the finance company will recover the money provided to you initially from any further invoices which are factored. This can lead to random cash flow if customers are slow payers or they go into insolvency.