Top 7 Business Tips For Surviving the Credit Crunch By Naz Daud At Isnare.com Ezine Articles

If you want to grow your business whilst your customers are struggling from the lack of liquidity in capital markets, then you might find that there are things you can do to ensure your balance sheet remains strong, and your business continues to grow. Through following my top 7 tips you'll find that not only is your business ready to survive the credit crunch, but it's also far more stable and viable during bullish markets too.

Top 7 - Tip 1

Fighting bad & doubtful debts is a problem that businesses face at any stage in the economic cycle. However, when liquidity's drying up in the market, you might find the pinch is a bit harder to take. Consider credit insurance, provide discounts for those that pay on time, and don't be afraid to turn away business if the risk is too great, Before you turn away business, though, consider offering the customer a small discount and asking them to pay up-front. Phasing the sale or only allowing the customer to buy a smaller amount at a time could also help cash flow.

Top 7 - Tip 2

Raising capital might not be the smartest things to do when a lack of liquidity is squeezing the supply-side of the money markets. However, if you have a healthy balance sheet and a good business plan, you may find you can still get a loan at the same price as you would expect. If you're a company that's relatively immune from economic sentiment, you will probably be able to raise a round of finance on good terms. And, if you can, you'll have money to spend on marketing whilst your competitors cut their advertising budgets.

Top 7 - Tip 3

Competing on price is a risky strategy when inflationary pressures are hitting your margins, and consumers are tightening their purse strings. However, when consumers are more price sensitive than ever, and your competitors are looking weak, then there's never a better time to pounce!

Top 7 - Tip 4

Diversifying income sources is what fund managers have been doing for years. Too much exposure to one asset class, economy, sector, or currency can spell problems for fund managers, and it can cause problems for your business too. For example, why not have your sales team work on drumming up some international business in different markets from the ones they are accustomed to? If you've got a strong customer base from the manufacturing industry, why not try to get your sales team going after online businesses and engineering firms too?

Top 7 - Tip 5

Public sector spending will often increase during economic uncertainty as the treasury attempts to inject liquidity into the marketplace. You can pick up this liquidity at the source, from the most credit worthy customer there is, if you are able to win public sector contracts.

Top 7 - Tip 6

Buy now and take advantage of lower interest rates, and less economic activity. You may find suppliers will offer you a discount when their sales aren't looking to great.

Top 7 - Tip 7

Hiring smart people is much easier when many of them are losing their jobs. Make sure your business considers hiring, especially for positions that will deliver immediate results, when the markets aren't functioning the way they are supposed to.

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