The r-word offers many different connotations for entrepreneurs or business owners. In recent months there has been an endless stream of bad news relating to the economic crisis that many people have unwittingly found themselves in the midst of. The overall picture being presented is one of concern and caution.
Numerous schools of thought have voiced their opinions in relation to the impact the economy is having on the world of business. The correlation between business and the general state of the economy has become fluid and forever changing. Some people regard the changes as being all doom and gloom whilst others see it as an opportunity to develop and create new business or to add leverage to an existing business.
Depending on whether you have a positive or negative perception, the “recession” could be perceived as being an opportunity. There are many business people who do not think that a recession is a time to be mourning the loss of or shortage of business opportunities.
Conversely the recession is viewed as a time of opportunity to secure new business or to grow an existing business. Here are some quick tips to help you and your business through the recession.
- If you are running your business without the help and advice of an accountant then you need to acquire one ASAP. First and foremost reducing your tax liability should be your first a priority. You never know it may well be the tax man that owes you money.
- Review your monthly cash flow and budget both on a personal and business level – try to cut down on unnecessary expenses.
- Try and build up a cash reserve for emergencies or to tide you over during lean months.
- Increase the limit of your revolving line of credit with prospective suppliers based on your order book.
- Review your business plans. Even in uncertain times it will be necessary to consult plans despite continually changing circumstances.
- Take the time to scrutinise business processes and operations. Efficiency in business operations can save considerable sums of money.
- Continue to provide staff with training – highly trained staff will be an asset to any business.
- Be on the lookout for acquisitions. Recessions are great opportunities for mergers and acquisitions and another business’s loss can be your gain.
There is not a one size fits all approach to coping with a recession. The balancing act is to continue saving money where possible whilst continuing to make money. Difficult circumstances require focus and determination. It is important not to let other people project their negative thoughts onto you. Above all remember to stay positive and look out for opportunities.