Keeping your business afloat and thriving through a downturn
Our team at Lombard Accountants are aware that to keep your business afloat during a downturn, like the one we have all just been to in Ireland, you’ll need to be agile, innovative and resourceful. Showing flexibility in the face of adversity is also likely to play a big part in your business’s survival during an economic downturn.
The Lombard Accountants team also understands that no business owner has all the answers, and there are some important steps to take if you’re going to overcome the challenges of a downturn and stop your business from sinking.
Here are some tips from Lombard Accountants to help you keep your company afloat and thriving through a downturn.
- Improving your cash flow – during a downturn, money will be tight and your cash flow position is likely to be poor. To improve this, you need to be proactive about reducing overheads, billing promptly, following up on overdue invoices and making sure that the minimum amount of cash flows out of the business, and the maximum flows in.
- Negotiate with your suppliers – if you can wrangle a better deal from your suppliers, that goes a long way to enhance your cash flow position. Negotiate with your suppliers to agree on better terms or cheaper prices, and talk to your landlord about a reduction in rent – or even a rent holiday if the situation is extremely dire.
- Accessing additional funding – when your cash reserves get tight, there may be a need to look for additional funding. This could mean asking your bank manager for an extended overdraft, approaching business lenders for a loan, or even looking at attracting private investors or private equity firms that may want to pump money into the business – although you’ll need a strong business plan for investors to be willing.
- Evaluating your market offering – to generate enough revenues to survive, you need your products and/or services to be selling. To that end, it’s worth evaluating your market offering and making some changes. Do some products deliver a much higher return than others? If so, you could make more money by focusing purely on these products and having a tighter and more profitable product range.
- Evolving your marketing and sales – communication with your customers during a downturn is vital. Keep them in the loop and let them know that your products/services are still there for them. Reevaluate your marketing channels to make sure you’re hitting the right audience. Is your online presence as good as it could be? Are you providing enough information on your website and social channels to help solve your customers’ problem? If not, what else could you do to bring in more enquiries and sales?
The better prepared you are, and the faster you react, the more likely it is that your company will ride out a downturn successfully.
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