Survivors offer advice on how to stay afloat

Feb 9 2009 by Karen Dent, The Journal

SMALL firms that survived the last recession in the early 1990s are offering advice to entrepreneurs who have set up in business more recently.

Focusing on business planning, being flexible and remaining determined to succeed were the top tips picked up from North East businesses who had weathered previous economic downturns.

The research was put together by O2 from its small business customers in Newcastle, as figures from the Federation of Small Businesses suggested up to 30,000 small firms face going bust this year.

The Top 10 tips were:

1. Get the basics right – have a 2009 business plan in place and accurate financial forecasts.

2. Cut costs – scrutinise expenditure to identify non-essential costs, such as expensive office furniture and staff.

3.Careful cash flow management – ensure all incoming and outgoing costs have been accurately recorded.

4. Spend on marketing – customers still need to hear about your product.

5. Determination – businesses need to work harder and smarter.

6. Hold on to customers – existing customers were highlighted as the most common source of revenue growth during the last recession.

7. Diversify your product and customer base – look at ways to adapt or broaden the appeal of your product.

8. Deliver excellent customer service – this was identified as essential by 90% of those questioned.

9. Credit check customers – keep a close eye on overdue payments and ask for payment within shorter payment terms or even in advance.

10. Invest in the right technology to increase efficiency.