5 tips for small businesses to survive and thrive in tough economic times

The UK has just announced that growth in the first quarter fell to only 0.1%. Construction and retail sectors were hit particularly hard with the bad weather having a significant impact. 

Consumer confidence remains low with high inflation and slow wage growth being contributing factors

So how do small businesses cope in these challenging times? How can they keep stable and even grow when the overall economy is underperforming?

Here are 5 tips for staying on course:

1. Pay attention to the financials

This is a time to put additional care into financial management. Ensure that you have a regular routine for record keeping and reviewing business profits. Use forecasting to look ahead and ensure that your finances are stable for three, six and twelve months into the future.

2. Stick to the knitting

This is not the time for being distracted by exciting and speculative new ventures unless you have significant reserves or adequate financing in place. Focussing on the fundamentals of your core business - looking after customers, ensuring operations are efficient and effective and that current trading is profitable will pay off in the long run

3. Keep creditors informed

If cashflow is tight it is important to keep creditors informed and work with them rather than lying low and hoping things improve. If your suppliers know that you have a plan and are intending to settle with them when you can, they are more likely to stay supportive than if you keep them in the dark or break promises

4. Talk to your bank

If your business is going through a difficult period, talking to your bank at an early stage is a good idea. It is possible that a refinancing package or extended overdraft taken at the right time could make the difference between fire fighting and a more managed recovery

5. Don't stop marketing

When finances are tight the temptation is to cut back on all discretionary spending, including marketing. That could be a mistake because when the upturn happens you will not be in the best place to take advantage. It is a good idea to review your marketing however and concentrate on the activities which are delivering tangible results.

There are no guarantees for survival and growth for any business. In tough times, doing the basics well and following these tips should help.

If we can help at Base52, please get in touch

www.base52.co.uk