SMEs Recession Survival Tips (Part 3)

Adapting to the Recession and Winning Sales
In the previous two articles we highlighted how businesses need to get to grips with their current financial situation and covered a few ways to improve their cash flow plus how SMEs can adapt to the recession and win contracts and sales to further strength their position.

This article focuses on how SMEs can make further internal improvements to not only save money and protect their businesses, but also make them more successful.

Contingency planning
It’s always best to have a back-up plan, by reviewing the current known risks a business can identify ways to eliminate or reduce business risk making them more robust. Plus make contingency plans provides peace of mind as they are prepared should the worst case scenario occur.

Typical areas of business risk include:

• loss of key employees
• failure of supply from key suppliers
• breakdown of critical processes
• loss of key markets
• compliance failures
• competitive threats
• technological obsolescence

Communicate with your staff
There is nothing like uncertainty to make staff nervous and get them gossiping. Problems real or imaged need to be addressed before they get out of hand. Business management should discuss issues with their staff openly and honestly, keeping problems in proportion.

In addition to highlighting and managing issues regular communication can help managers make staff aware of their role in supporting the business through a recession. By using realistic targets with appropriate reward incentives staff can become more active in saving the business money.

Cutting staff
No one likes the thought of having to make people redundant plus redundancies have to be managed correctly as they have many legal procedures that must be followed. If a business needs to make redundancies its best to get advice from organizations like Business Link and/or extra support from an experienced employment management consultant to make sure everything is handled correctly.

Happily there are other ways to make staff savings without the need for redundancies. Management can review their staffing to see if they need to replace employees who have already left the company and to see if jobs can be combined to make better use of their staff’s time.

Flexible working like shift or home working can also be introduced as this is known to improve productivity and lead to more efficient working. Providing an organization has the right systems in place flexible working can actually save businesses money.

Suppliers
Now is a good time for businesses to renegotiate supplier contracts by securing the best deals possible for the longest periods. It can also be a good time for businesses to source additional, alternative or back-up suppliers so that they are never too reliant on just one supplier.

Keep Positive
It’s very easy to get swept along with the recession doom and gloom, but business managers should not give into the recession blues. Keeping positive is vital to keeping up business moral and needs to come from the top down.

Celebrating when targets have been met and new business won is a great way to keep moral up and staff motivated.

By staying positive businesses can be more proactive and united, which is one of the first steps to a successful and sustainable future.

Don’t Panic
Yes things are tough, but not impossible and there is plenty of help out there for businesses from new Government Schemes to existing business support groups like Business Link.

In addition managers can also get extra expert advice from specialist business management consultants who often have more experience and a clearer idea of what a business need to do. A good consult should be able to help a business review their current situation, make necessary changes and create realistic plans for the future.

Yes a management consultant will cost extra money, but their experience and knowledge can be worth the extra expense, however, before hiring always do some checking first to make sure the consultant has the right level of experience, can provide client references, has fresh creative ideas and will listen and communicate regularly.

SMEs are important to the UK economy and need support to cope with the recession, by getting a strong hold on their finances, adapting their business promotion and strengthen their internal systems businesses can become stronger and more successful even during a recession.

Author: L M McMahon - Hedley Basford Management Consultants

Resources: Hedley Basford skilled and experienced management consultants are committed to making your business more successful by offering you a personal service with honesty and integrity.