The past few years has affected every business in so many ways. Any business can be prone to tough times but how do you survive those difficult times and whether through the storm post Covid 19? It is crucial to ‘be prepared’ just like the boy scouts would say.
So what steps can you take to be prepared as a business.
Below are ten useful tips that have proven useful to many businesses in these extraordinary times.
1) Cash Flow Management
Making sure your customers are invoiced regularly and promptly is key to maintaining a healthy cash flow. Needless to say it is vital to chase up all late payments to ensure credit terms are not exceeded. Similarly, expenses have to be kept in check to avoid unnecessary spending. A good bookkeeping/accounting system should be in place to keep track of both income and expenditure
2) Credit Control
All credit customers must be credit checked to avoid bad debts and high-risk customers. If their business fails it will most definitely affect yours. The same goes for suppliers as well. You need reliable suppliers to avoid letting down your own customers.
3) Cutting Costs
Look for areas of wastage in the office such as paper usage and consider going paperless or by using cloud solutions. Also review energy consumption, internet and telephone providers. Is it possible to switch to a cheaper provider without losing quality?
Staffing costs can also be reviewed to increase efficiency or promote working from home, part-timing and flexi-working. All these could reduce costs in the long run.
4) Marketing Strategy
There is a temptation to cut down on marketing during difficult times but the truth is there is a lot of competition out there. You cannot therefore afford to cut-down on marketing but you can consider switching to a more effective marketing system that best suits your business.
5) It is good to talk
In difficult times, the temptation is to keep mute and under the radar. The reality is you must keep in touch with your bank, suppliers, customers and employees. They can help you identify problems before they arise, and also help them feel confident in your business. It is good to talk.
6) Get Online Get Noticed
It goes without saying that a business with no internet presence is planning its own funeral. The internet can be an inexpensive way of advertising your company. Websites, twitter, Facebook, monthly newsletters, WhatsApp, Instagram can all help promote your business. Keep them updated and you could be in for a pleasant surprise!
A regular review of your pricing to make it more competitive can help you maximise your profits and stay competitive.
8) Spend wisely
Avoid the temptation to buy on impulse things that you probably do not need or may never use in your business. Sometimes what you have currently can do the job just as well. Leasing equipment can be a useful way of buying new without splashing out too much. Besides the costs are all tax deductible.
9) Expand Your Customer/Supplier Base
It is always a good idea not to put all your eggs in one basket. Make sure that as with a wider customer base, you also have a range of suppliers. That way you are not vulnerable to the whims of a particular supplier or customer for that matter.
10) Don’t Wait, get assistance now
Finally, don’t wait until things have reached a crisis point. At times like this you need an ally that can help with planning and putting the right structure in place.
We at Maisanda & Co Chartered Management Accountants are ready and willing to work with you and your business to identify any areas of concern for effective resolution and regular monitoring. We specialize in SMEs and have a vibrant team based in Sobus, Freston Road Hub, Kensington.
Please feel free to contact us for all your accounting, payroll, tax and business advisory needs.
Article written by: Ily Maisanda ACA, ACMA, CGMA, M.Sc. CEO, Maisanda & Co
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