During an economic downturn small businesses must tighten up to
survive. However, there are many changes that a small business can
make to their values and daily operations that will assist them in a
downturn. Your CPA can be a valuable resource for helping you review your current status.
QuickBooks in the UK published a 23 page discussion on the
state of the UK economy and very specific targets for small business.
This guide is well worth the read, even for US companies. The
Small Business Matters group of QuickBooks UK is focuesed on the small
business as its name implies. Many of their suggestions are
unilateral to any small business.
For example, their guide includes specific tips for Finance,
Business Strategy and Human Resources. A summary of their suggestions
are listed below.
Finance
- Manage your finances - be sure to keep track of where you are in
cash, debt and receivables. Your CPA can be a valuable resource for
this.
- Slash your bills - check your regular bills to be sure that all the
services you are paying for you really requested. Be sure the rates
are also correct.
- Manage your relationships - be sure you keep in close touch with your customers, lenders and suppliers.
- Explore funding - keep looking for alternate sources of funding.
Understanding what is available before you need it will help secure it
when time is critical.
Business Strategy
- At the heart - focus on your core and on what you do best. Now is
not the time to spend money exploring new untested ideas that may use
cash and not repay for several years.
- Understand your customer better - be sure your customers know you understand their business and their needs.
- Small business - since many large companies are discontinuing
relationships with smaller customers, now is the time to target them.
- Stay above the radar - as the economy bounces back you will want
potential customers to know who you are - keep quality advertising
running, not just quantity.
Human Resources
- Acknowledge the fear - employees are scared for their job and their
families. Look at your health policy to see if counseling is covered
and be sure they are aware of this. Be sensitive to changes in
employee behavior.
- Be honest - this goes without saying, but be sure to have honest
discussions with employees. Candy coating problems will only lead to
disloyal employees and a failing business.
- Invest in people - now is the time for quality training and
resources to better your work force. Develop your best people and keep
them contributing to your success.
- Put loyalty first - show your employees your loyalty. Small thoughts go a long way.
Read the full text of the Small Business Recession Review and Guide
for much more information. The key is to plan and perform. Think
about your business from all angles and have employees help you execute
that plan. Remember the plan includes more than just customers and
products.
Your CPA can help you analyze your business. Your CPA can also help you implement many of these items. Watch for our next article which will discuss how to select a CPA.
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