Surviving the recession
- Cash Control is Key
- Make sure you are aware of all aspects of your current financial position. Sticking your head in the sand and hoping it will all fix itself is never going to be constructive.
- Budget, forecast and review frequently; the sooner you know something is not quite right, the sooner you can take corrective action and minimise the harm to your business.
- Ensure you have an effective credit control process which closely manages debtors and receivables. Remember that you can always renegotiate credit terms if necessary.
- Proper Preparation Prevents Poor Performance
- Research your market thoroughly so you know your place in relation to your competitors, pricing, marketing and objectives.
- Plan both short-term and long-term achievable objectives. Remember to monitor your progress in relation to your plan, updating it if necessary and providing feedback to staff and other stakeholders if appropriate.
- Think to the future and ensure that any retention of title clauses in your terms of trading are sufficiently drafted to secure your proprietary interest and protect yourself if a debtor becomes insolvent.
- Think Outside the Box
- In uncertain times the rules have to be adapted to achieve the best results and slightly less conventional methods of raising finance, such as asset-based lending, may offer viable solutions. Ensure you’ve considered all the options and evaluate which best suits your goals.
- It’s very easy to get caught up thinking about the welfare and activities of your own company but don’t forget to consider the wider environment and potential risks from external sources such as suppliers.
- Be Proactive
- If your cash flow becomes problematic, speak to creditors early and try and initiate informalarrangements to defer payment temporarily.
- If a debtor enters insolvency proceedings, make a claim as soon as possible and inform the appointed insolvency practitioner so that you are kept informed and can participate in the process where possible.
- If you think you’re at risk of becoming insolvent, contact an insolvency practitioner as soon as possible so you can take advice on saving the business, minimising liabilities and maximising returns to creditors.
Date: 25th March, 2009
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