I will take my hat off to anyone who is currently exposed to the mortgage market and is having hard times. Survival is currently the first thing on people’s minds.
You can, however, take this opportunity to examine all aspects of your business to ensure you are getting the maximum bang for your bucks.
By examining your business, what do I mean? I mean putting your business through an MOT and checking absolutely every nut and bolt to ensure it is as efficient and effective as possible.
A thorough review
Pretend you are a VAT inspector and look at every high-cost item that you have in the business; the building you are in, staff, cars, salaries, maintenance contracts, phones, luxuries, papers, subscriptions, and review everything.
Throughout this period, keep items that are essential for compliance and survival yet question items that are nice to have but really for the long term. Is your office too big? Can you get cheaper premises? Can you renegotiate your rent? Questions like this will give you a quick indication as to your company structure.
Your staff are your best and most expensive asset. Is everyone making their contribution to the operation? Do you actually need the function they provide to survive?
These are very hard questions but must be asked in this current climate. There is a surplus of very good quality staff around at the moment. Is now the time to replace people that are not totally committed to you?
Responsibility
All this sounds hard but you have a responsibility to your business to monitor these things. As an example, we have reviewed all our phone lines and have reduced from four to one.
We now ring out using unlimited minutes on one mobile network’s tariff supplemented by a number of handsets. This has saved over £500 a quarter. We share broadband wireless with our neighbours, have cancelled the water machine and have reviewed every direct debit.
We have reviewed all of our processes, slimmed them down and we are now driving the office paperless. We are moving to smaller premises and are using outsourcing for roles that we previously would have paid staff for. We are even doing our own VAT returns, saving another £1,000 per annum.
None of these changes negate turnover but in the short term they enhance the business by making it fitter, while putting it in a healthier position to survive.
Planning and cashflow
Once you have studied the costs, careful planning and cashflow management are key. Be careful who you actually do your business with.
Make sure your business partners are financially fit and healthy too. If you are depending on your cash flow from a company that is not reliable in its payments, then this is very dangerous in the next quarter. Those firms might never pay you.
How would this affect your business; all the costs, all the work, all the overheads and no payment? In the next few months be very careful who you do business with to avoid this situation.
Once we get through the current climate the money markets will undoubtedly get easier. Hopefully, interest rates will have dropped even further, the mortgage and housing markets will be showing signs of picking up, and your business will have survived.
You will be much fitter and more profitable as a business than ever before and the pitch that you play on will be less crowded so you can capture a greater market share.
