15 ways to weather the storm

 
The Jo Hansford salon may be situated in the chi-chi London district of Mayfair, alongside some of the most extravagant fashion names in the business, but managing director Joanna Hansford knows that nobody is 100 per cent recession proof. Here are her top tips on how to weather the storm, keeping both your clients and your bank manager happy and above all, keeping your business open.

1. Money talks
If you're out of cash and out of credit, you're out of business. You need a quarterly budget based upon historic costs and projected additional expenses. Monitor trends in your cash flow to anticipate tricky situations. 

2. Take care of the pennies
Keep a tight rein on your debtor control account.  Businesses are holding on to their cash longer than before, resulting in late payments – and these are having a ripple effect throughout the SME community.  Keep clients within agreed credit limits.

3. Tighten the purse strings
You can forecast expenses – but you can’t forecast revenue. In prosperous times, companies tend to clock up a lot of needless expenses. It’s time to take a long, hard look at those. From printing and couriers to surplus staff and expensive energy suppliers, cutting back will help you weather the storm.

4. Make friends with your bank manager
Stay in touch with your creditors. Building a good relationship with lenders will help you should you ever need to renegotiate the terms of your loan agreement.

5.  Money spinning ideas
Growing profit is more important than growing revenue. Make sure you understand what drives profitability in your business. To spur demand, you may have to get creative with pricing and product offerings

6. Don’t bank on word of mouth
Many companies cut advertising/marketing budgets during recession. This can be a mistake. Research shows the marketing mix bolsters companies during recession. Instead of cutting these budgets, review the methods you are using. Does your current strategy bring in the right results?. Do you need to redifine your

7. Go the extra mile
If your business is slowing down, you can't afford to lose any customers, so stay competitive by analysing every aspect of your customer's experience and try to create the most seamless and memorable one on the market. That should do more than just keep your customers loyal - the positive word of mouth generated will help attract new customers without costing a penny.