What you need to do if you anticipate a severe downturn in your business revenues. Easy to follow steps with guidance.
- Stay healthy, follow the Government guidelines for you, your family, co-workers, employees and community. Work from home where you can manage administration.
- Work out your expenses (including salaries) for the next three months.
- If you are in retail – work out your breakeven point by dividing your costs by the gross profit margin. That’s the sales figure you must achieve to cover expenses.
- If you are in the service sector, add your expenses to how much do you need to live on and that’s the breakeven point in terms of billings or fees you need to charge over the next three months.
- For hotels, pubs and restaurants contact us immediately. For manufacturers work out product sales and do the same calculation.
- If it looks like you are not going to be able to operate at break-even, look at your cash or bank balances – have you got enough money saved to survive after paying anyone you owe money?
- Estimate your cash flow over the next three months. If you need help with cashflow projections we can assist.
- If you need help with these calculations, we can talk you through the process. Without the figures you cannot make clear decisions.
Once you have a grasp on your figures and you consider you have a “viable” business (i.e.you can survive for the next 3 months):
- There is Government support and we will provide you with the information and guidance on how to apply for this help and if you qualify.
- Talk to your bank if you have loans or an overdraft. They will be supportive of viable businesses.
- Get your members of staff involved in a discussion of likely trading conditions and get their input on reducing costs and maintaining revenues.
- Review your list of products and services and eliminate those that are unprofitable or not core products/services.
- Don’t waste time and effort on customers who won’t or are extremely unlikely to pay
- Review your debtors list and chase up overdue invoices (if appropriate).
- Offer existing debtors extended payment terms and/or discounts.
- Agree extended payment terms with all suppliers in advance.
- Put extra effort into making sure your relationships with your better customers are solid.
We are here to help protect your business’s survival by accessing support. However, if you’re concerned that your business is no longer viable – talk to us and we will run through the options.