On top of the global pandemic, there is a recession about to hit and even if you are fortunate enough to still be trading in the current climate, your supply chain and clients may start to roll away. It is unavoidable. it's on its way, and it likely to be a big one.
5 things you can do right now.
Save costs. Exactly as we advised before the lock-down, companies have to cut back on unnecessary costs. Audit your P&L and management accounts, figure out what is not essential and streamline your expenditure.
2. Refinance. If you are carrying expensive debt, see if you can get a better rate or facility now before credit dries up completely.
3. Negotiate terms with suppliers. Where you have credit lines or narrow payment terms, pick up the phone or video call your suppliers and reps and push for better payment terms. Follow up with an email by all means but don't negotiate over it.
4. Consider alternative revenue streams. It’s easier said than done but what else is your business capable of? Can you apply your workforce to other ventures and make that profitable? Be sure to check your PI and insurance covers it.
5. Do it now. There is literally no time to lose. You’ve got to take the steps now before it’s too late and your options are taken away.
People obsess about income & turnover, but too few scrutinise their expenditure or costs. At the risk of sounding like a broken record, you’ve got to really look at what is critical to the wellbeing of staff and profits, and which isn’t.
The process of putting cash away for precisely this sort of occasion is why we advise clients to put aside a % of income each month. It is a really tough time but companies still trading shouldn't be lured into a false sense of security. A biting recession – the likes of which most people have never seen before – could wipe out the ill prepared and foolhardy.
Start today.