When Business is Struggling

The 9 Big things to do to help your Business when Struggling

  1. Cash Flow

    • Plan your cash flow closely.
    • Ask for further credit from your suppliers.
    • Ask for the credit periods to be increased from your suppliers.
    • Consider factoring your debtors.
    • Consider leasing your machinery, rather than buying (use lease and buy-back).

  2. Purchases

    • Look at buying only what you need.
    • Talk with other businesses in your industry and see if you can bulk buy together to save costs.
  1. Stock
    Look at reducing stock levels so that what you have are just in time (JIT) supplies. Just in time basically means you will not order goods until the customer has ordered and your supplier will make to order and deliver to you within 48 hours. If necessary, ask some of your suppliers to buy back some of your stock at cost price so you can turn that stock into cash, even if there is a discount given to that supplier.

  2. Products and Services
    Look at your products and services and see if there are any you should discontinue for a period, especially those outside of your core product range. Make sure your quality and service are excellent, because you are competing with other firms and this may make a difference in getting that sale.

  3. Cash from Customers
    Call up some of your customers and offer them discounts for early payment of their accounts. Alternatively accept only cash on delivery with discounts when they want to buy more from you. All efforts should be focused on increasing cash supply and reducing expenditure.

  4. Invoices
    Charge interest on overdue invoices. Some overdue amounts can add up to a considerable amount of lost income if the debtor owing takes another month or two to pay you.

  5. Overheads
    Look at your fixed costs and reduce what is not required. Ask staff to turn off unnecessary lighting and shut down heaters or computers when necessary. If you have to relocate to cut costs, then do the figures.

  6. Utilities
    See if any savings can be obtained from reducing your expenditure on your utilities, such as power, telephone, gas supplies, etc. Sometimes your utility company can investigate areas where savings can be achieved.

  7. Office and Administration
    Look at your office costs and staffing. Considerable savings can be made by laying off unnecessary people. If business is down and sales are reduced, this should also transfer into less administration required. If there are any unnecessary staff still employed, ask them to take their annual holidays early, or whatever leave they are due, or lay them off.