Beating the recession
Earlier this year NatWest announced a series of initiatives to help SMEs in the North West deal with the effects of the recession. One of these initiatives is a series of seminars across the region designed to offer clear and unbiased information on how to manage a business through the economic downturn.
These have been organised in conjunction with other professional advisors including local accountants, solicitors and public bodies such as Business Link. The aim is to provide business owners with practical guidance on not only how to survive the recession but also how to reposition for growth and take advantage of opportunities that exist in the market. The key themes to emerge from the seminars are:
• Take a step back – Revisit your business plan and ensure that you have a clear picture of what is happening to your company at present. Be honest, don’t kid yourself and be prepared to ask some tough questions. Have a “plan B” in case events take a different turn – be it funding options; alternative suppliers; different routes to market.
• Consider the future capability of your company to win new business. Whilst it is important to keep costs to a minimum, this must not be at the detriment of being able deliver the service standards required to win new deals or take on additional customers.
• A robust financial model is essential to make informed decisions – You need to be able to stress test your business. Ensure you know your exact break-even point and examine the impact of lower prices and narrowing margins. Do you need as much stock? Reducing this will help release cash. Can you renegotiate contract or payment terms? Can you improve your credit control? Less conventional types of finance such as invoice discounting can provide an ongoing stimulus to cash flow.
• Are you making best use of the different advice that is available? Don’t be afraid to ask for help when you need it. Talk to your bank, accountant or other professional advisors – the sooner you make them aware of a potential problem the quicker they can respond. You should also take advantage of the free advice offered by public sector bodies to explore the range of public sector finance available for your business.
Peter Richardson, regional director for NatWest.