SMEs: PLUGging the economic black hole

With the autumn months now hurtling unavoidably towards us, summer 2008 looks set to go down in history as something of a business black hole. Airlines Zoom and XL went bust leaving ATOL to pick up the pieces across the globe, banking received a global shake-up with rescue efforts hitting the headlines, and now the Football Association looks forced to sell-off a slice of Wembley or two to help weather the storm. So whilst the situation may feel bleak, with many larger companies now wondering if they can hold-up as the economy plays business dominoes all around them, Bibby Financial Services is confident small and medium sized businesses can remain agile enough to negotiate the economic black hole – with a little careful planning.

David Robertson, chief executive of Bibby Financial Services, commented: ìWhilst the current financial climate is a challenging one, itís an environment where the smart, prepared business owner can still thrive. The importance of sound financial planning has never been more vital which, if done correctly, can act as a plug against the seemingly all consuming void.î

With this in mind Bibby Financial Services have prepared the following tips to PLUG the economic gap:

Plan – your budgets, where would you like to see your business going and, perhaps most importantly, what to do if these fall short of expectations.

Itís always a good idea to have a contingency plan, no matter how great things seem to be going, so avoid excessive spending during leaner months, even if things are on the up. And remember, a sound business model is a flexible one as you never know when you may want to try a change of tack.

Deliver good practice as standard – it shouldnít take an economic downturn to get your business affairs in working order. Strong, consistently enforced practices will help keep your business ticking over. And a smoothly run business generates a more positive profile overall which, in turn, will impact positively on all that you do.

Understanding your business – it sounds obvious but do you really know every aspect of your business, your client base, the market(s) in which you operate, the processes you utilise and the suppliers you use? Taking a little time out to (re) familiarise yourself with all facets of your business can be worth its weight in gold, identifying core areas in which to streamline or refocus your efforts.

Get professional advice – no one person can be an expert in absolutely everything so the savvy business owner or manager will seek professional support where and when they see fit. If your cashflow is suffering due to the bleak economic climate, consider your finance options and investigate the alternatives. Invoice financiers, such as Bibby Financial Services, can release cash tied up in unpaid invoices. By chasing and collecting outstanding payment on your behalf, not to mention providing current-climate-critical bad debt protection, you can see cashflow freed up before your very eyes allowing you to focus on whats really important – driving your business forwards.

Bibby Financial Servicesí chief executive, David Robertson concluded ìWhilst some businesses will undoubtedly succumb to increasing financial pressure, both on and all around them, small to medium sized business can avoid the wider economic stresses with rigorous planning to fortify their cashflow. It is these businesses that will ultimately excel in the inevitably less crowded market.î