Tuesday, 2 December 2008

Are there any steps I can take to recession proof my business now?

There are a number of steps you can take to make sure your business stays healthy during a recession. Make sure you pay particular attention to the following:

Cash is king

Manage cash - if you're out of cash and out of credit, you're out of business. You need a good 13 week cash forecast, generated NOT from the income statement but from a detailed understanding of receipts and disbursements. Monitor trends in your cash flow to keep on top of any sticky situations.

Collect with passion

On a related point, manage receivables aggressively. Businesses are holding on to their cash longer than before, resulting in late payments. These late payments are having a ripple effect through the SME community. Receivables will trend up, and some of your customers may become troubled as well. Don't keep extending credit.

Taken from an extract written by Doug Richard. Doug Richard is a former Dragons’ Den panelist, entrepreneur, investor and contributor to VentureNavigator

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Why it's important to take advantage of a Virtual Office when you're a small business

If you find you spend significant time on administration and fielding basic enquiries that add relatively low value to your business, you may find these can easily be outsourced, allowing you to spend more time on developing and implementing sales strategies. It has been my experience that one person start-ups get lost in the administration and there is no-one to drive sales*. This is where a virtual office can be useful.

What you can do is consider the cost and compare to the extra sales you could generate if some of your time was freed up.

You are absolutely right to be considering the option of a virtual office rather than committing to an expensive lease and hiring a full-time resource. Failing to maintain enough flexibility in your cost base during the early stages of your business is a common fatal error. This may prove more expensive in the short-term, but will provide you with valuable flexibility to scale up as your business grows.

The last point to consider is your credibility. In the early days you do need to work on credibility. The appearance of being large, stable dependable is important. An office and help is part of this. I on the whole would probably lean towards a virtual office so you can be free to pursue growth opportunities.

Extract taken from an article written by Brad Rosser who is a serial entrepreneur and former right-hand man of Richard Branson

*Head Office provides an easy to use, powerful CRM database which can manage and track your sales effort. For more information email: info.headoffice@theawaypa.eu or telephone 08450 527565