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Surviving the credit crunch

Discussion in 'General Business Forum:' started by liverpool-photographer, Nov 14, 2008.

  1. Thought this might be of interest - it's something I wrote for a business website / magazine a couple of months back. All fairly obvious stuff, but may be helpful.



    ............................

    The first thing to do is to not panic. Panic, knee-jerk reactions can cost more money and not actually help in the long-run - for example the poorly thought through advertising campaign, or the quick email out to all your customers.

    Instead, use the time to re-focus your energies into something more productive for your business. These are usually things within your control. Here is a little list of things I have been moving forward with DJC Design in the last 3 months.

    1. Concentrate on your existing customers - a repeat customer is as good as a new customer, but you don't have to work so hard to get the business. A simple phone call is a great start, create a line of communication with them, perhaps offer them a loyalty discount on their next purchase, or a discount if they pay your invoices early.

    2. Monitor your business expenses - without having a clear idea of where your money goes you can't start saving money. We did a full business audit with our accountant and it enabled us to start 'with a clean slate'.

    3. Re-negotiate with your suppliers to reduce costs – this can a reduction in basic price, but more easy to negotiate are things like longer payment periods, buying stock in bulk, a barter exchange of services, perhaps in return for a long-term contract between the companies. Also look at any financial business loans you have, now is the time to negotiate better deals.

    4. Our business, providing photographic services to businesses, doesn’t hold much ‘stock’ in the traditional sense, but a quick audit meant we kept more than we required in the office. Either run-down or sell slow-moving stock at a reduced price.

    5. Check your utility costs using your audit – like household utilities there are bargains out there to be had, that a lot of businesses don’t switch because of the ‘hassle’. We changed our electricity suppliers to a green provider to match our mission statement and were surprised, even with green credentials; we still saved the business money! Things like insurance policies are also worth investigating.

    6. Don’t cut back on advertising or marketing – seems an easy thing to do. DJC Design actually has decided to increase its advert spend, as we intend to get the customers from the photography business that are failing. I guess re-evaluate where your marketing spend goes and look at the effectiveness – we have successfully used some targeted advertising on Facebook for example which has been great at pulling in leads and getting new projects.

    7. Look at your billing and invoice procedures. Are there ways to spend up payments – perhaps move to electronic invoices, electronic payments via BACS, automated reminders to debtors. These have all helped us maintain a steady cash-flow here – I put as much importance on getting people to pay on time, as I do getting that piece of business in the first place.

    8. Finally, don’t be afraid of asking for help. There are loads of organisations, both specific to your field of expertise, or to the geographical location that are there to give advice. Many support groups have forums and real-life networks and I find these very useful to bounce ideas around and give me a little support when I think things are going wrong.
     
  2. berry

    berry Active Member

    I would add:

    1) Get some Cash.
    get some cash or arrange a facility to cover a rainy day. Last minute running about will waste all time when you have a company to run. It will also be 1000 times easier now than when we have had problems which have caused cash flow shortages as the company won’t look good then. Build up a cash reserve. Arrange short-term finance options early. The last thing you want is to run out of cash so put facilities in place from a range of affordable sources - even if they are a little dearer than longer-term debt, better to have the option now than to go 'cap in hand to the bank' . look at it as insurance.

    2) Cash flow
    Update it and check the break even. Don't get caught out with "Oh hang on why haven't we got any cash for the salaries?"

    3)A lower business model?
    Longer term, look to move the business model to a lower cost base. By analysing the key costs of the business and the revenue it generate, it is possible to rationalise and focus on core business. It may be painful to cut some things out, but business is about adapting to the prevailing conditions.

    3.) Manage your creditors and their expectations.
    Don't lie. Get trust even if you only pay a bit.
     
  3. yeah - cash is king as they say
     
  4. Greg

    Greg Active Member

    Nice tips and information guys, thanks for sharing.
    Personally as a freelancer I haven't noticed a change in business, I'm as busy as I was when I started, have you guys noticed much of a change or a downturn in new business? or clients looking to cut back on their marketing/design expenditure with agencies/photographers?
     
  5. Slight downturn for me in the last 2 months compared with this time last year. Fortunately quite a few of my main clients are higher education / public sector , so fingers crossed their budgets remain at a constant level.
     

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