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~FINANCE~
‘2010 is going to be a tough year. It’s time to cast
a critical eye across your entire operations’
I
f you’re running a business, the problem in 14 weeks’ time, rather than just with £150,000 of bills to settle. ‘There was
chances are you’ve been concentrating realising when it’s too late to take action.’ nothing wrong with the company. Despite
on cash flow like never before during the recession, our holiday homes were selling
the past 12 months. 2) TALK TOUGH WITH YOUR LANDLORD really well and we were very profitable. They
Late payers and non-payment, cancelled Paying three months’ rent upfront can be a just panicked and wanted to reduce their
overdrafts, extreme lending terms and huge drain on cash flow. Graeme Marsh, exposure in the property sector.’ By doing a
shrinking markets have conspired to create managing director of personal fitness lot of research, Hack secured alternative
brutal trading conditions, and the suspicion business Aegis Training, eased his company’s funding. ‘We found a Swedish bank that was
is that 2010 isn’t going to be that much cash flow by arranging monthly payments. prepared to back us because we had a
easier. Here we speak to owner-managers to ‘Our landlord was very sympathetic and squeaky clean credit history.’
find out how they’ve manoeuvred to create realised we were in a difficult position, so
additional headroom for their businesses. was prepared to make some concessions.’ 5) COMMUNITY CARE
If obtaining bank funding is simply not
1) PLAN YOUR CASH FLOW 3) BRING OUT THE SCALPEL an option, check out the Community
It sounds ludicrously simple, but the failure ‘If you’re experiencing turbulent times, cut Development Finance Institutions. There are
to plan ahead for incoming and outgoing early and deep,’ says Paul Daniels, director of more than 60 of these organisations in the
costs remains one of the primary causes of Involved Investors. ‘There’s no point in just country, providing loans and support to
company liquidations. Craig Mackie, chipping away at the workforce. You can viable businesses in need of funding. Visit
managing director of graphic design always rebuild at a later point. We had to cut
www.cdfa.org.uk for more information.
company The Shine, realised his business our sales team by nearly half last year, which
had truly lost its lustre when he couldn’t was the appropriate move. Now things have 6) HOUND DEBTORS
afford to pay a £60 invoice. ‘The penny started to recover, we have been able to A recent poll by advisory firm Tenon
dropped that I had been thinking about my build it up again.’ Obviously, this isn’t so easy Recovery found that 70 per cent of
cash flow on a day-to-day basis rather than if you’ve already made massive cuts and are entrepreneurs are chasing debtors more
looking six months ahead,’ he says. By almost running on empty. vigorously to get money in. Edward Rimmer,
scaling down the company and implementing chief executive of Bibby Financial Services,
strict financial planning, Mackie was able to 4) DON’T BELIEVE THE BANKS says companies should check that all their
bring his business back from the brink. ‘Now Carol Hack, owner of property development invoices are raised on time, with the correct
we have spreadsheets that detail all our company Clearwater, suddenly had her bank terms and conditions in place. ‘Call up and
invoices and will indicate if we have a funding pulled earlier in the year, leaving her confirm the client was satisfied with the ▼
BUSINESS XL 39
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