Australian Business Directory

Sunshine coast accountants advice on keeping your business safe

It’s no secret that the global credit crunch has made thing tough for many small businesses around the world. Sunshine Coast accountants, HBA Accounting say that people are tightening their belts wanting to protect their own spending, which means they’re naturally spending less money where it will do the most good.

In times of financial difficulty many small business owners are tempted to cut back their spending in order to attempt to maintain margins that may allow them to stay in business a little longer. Unfortunately many of those cut-backs may actually cause your business to suffer rather than survive.
There are some things you can do to help your small business beat the economic recession.

Here are some tips that may help you beat the credit crunch and survive the economic recession.

1. Review Bank Charges
For small business owners, maintaining a close relationship with your bank is vital at any time, but it’s especially important during a global credit crisis. Be sure you speak with your bank and review the charges your business is paying. In many cases your bank will be happy to discuss special deals or even a reduction in some fees that could help free up cash flow to be used on other aspects of your business.

2. Talk With Your Accountant
Maintaining a relationship with your accountant during economically difficult times is crucial to your business’s survival. Your Sunshine Coast accountant can offer some amazing advice that may not only help you clear up cash flow, but may also find ways to help you reduce your tax liabilities before they arise.

3. Cash Flow Forecasting
Look carefully at your cash flow forecast and make some careful estimates about your future revenue and income. Be conservative with your estimates and do the same with your costing forecasts too. If your forecasts don’t look good, then you’re in a position to adjust your planned spending and review your level of drawings until such time as business turns around again.

4. Negotiate
If your small business is carrying a debt of any kind then call your bank and negotiate with them for a reduction in interest rates. This could include your company credit cards or business overdrafts. Banks are surprisingly willing to negotiate with small business owners faced with potential troubles during an economic recession.

5. Reduce Debt
If your cash flow allows, try to reduce any debt your business is carrying. This could help reduce your outgoing costs and leave you with less liabilities to worry about in the longer term. Talk with your accountant about which is the best option to reduce first.

6. Credit Control
During an economic recession there is nothing more important to your business than credit control. Be sure your accounts are up to date. Chase any outstanding payments that are due to you, brush up on your cash collection procedures and talk with your accountant about any other avenues you might consider.

7. Be Kind To Creditors
If you owe creditors for stock you may have ordered or for operating expenses, such as rent or utilities, be sure to maintain a dialogue with your creditors. If you know you’re going to be late with a payment call and make arrangements with them at once.
 
8. Salary
Evaluate your own drawings from the business and be honest about how much your business can logically afford to be paying you. While you still need to pay for living expenses and conduct a life, you need to be sure the amount you’re spending is appropriate with regard to how much cash flow your business needs to survive.

9. Broaden Your Debtor Base
Most small businesses thrive on one major source of income derived from a primary activity, product or service. See if you can find ways to incorporate a secondary, complimentary product or service to offer your customers that could potentially bring a new income stream into your small business. This could be a value-added benefit to your client or an alternative purchase option that may help your cash flow overall.

10. Marketing
Even though an economic recession means tightening belts, it definitely does not mean reduce the amount of marketing you do. Customers still need to know that your business can offer great value for money at a time when they’re careful about what they’re spending. Accountants agree that your advertising and marketing efforts are vital during a credit crisis, especially if they make you stand out from your competitors.

Sunshine Coast accountants, HBA Accounting can advise you on the best approach to tightening your business belt and streamlining your financial processes. Contact them today to find out how you can beat the credit crunch.