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

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Don't get mad - do something positive

I've recently finished reading 'How to be human'. It's written by the very clever people at New Scientist magazine and is full of facts about how our bodies and minds work and what makes us special.

As a life-long runner I was delighted to learn that we were 'born to run'. It seems that humans are built for long distance running. We have apparently evolved this way to help us hunt and 'run down' prey to exhaustion and also forage over a wide area.

I learnt there is no such thing as a 'sugar rush' and the secret to long life is a combination of exercise, diet, managing stress and good genes. We can do something about the first 3 things but not the last unfortunately.

I also learnt a bit about emotions. I hadn't realised that there are 6 basic emotions - happiness, sadness, fear, anger, surprise and disgust. There are also secondary emotions like curiosity and confusion. A fascinating fact is that all these emotions illicit different facial responses which studies suggest are innate rather than being learned. So when we are curious our heads tilt to one side and the muscles in our forehead and around our eyes contract. Useful information for poker players but they probably know this already.

So what about using emotions as a force for good and for pursuing our goals?  On the face of it anger is a destructive emotion but there is evidence that it can also be beneficial and energising. To be a catalyst for positive change, anger needs to be channelled in the right way.

There is a very famous saying from Aristotle about anger, 'Anybody can become angry - that is easy, but to be angry with the right person and to the right degree and at the right time and for the right purpose, and in the right way - that is not within everybody's power and is not easy'

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