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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