With the cost of running a small business rising by 9.9% a year, these are challenging times for any entrepreneur.
But according to MORE TH>N Business, many people under the age of 40 would not have worked through a recession before, meaning they could be ill-equipped with the basics on how to keep costs down.
"The next 12 months are going to be very tough for many small businesses as they adjust to a slowing economy, particularly young business owners who may not be conscious of the impact a recession can have on business," said Mike Bowman, head of MORE TH>N Business.
"As the turmoil in the financial markets feeds into the real economy we are going to see a lot of small businesses encounter cashflow issues," he added. "Small business owners and operators need to rein in spending and start considering how the next year will roll out for their business market."
MORE TH>N Business offers the following tips on how to
survive the coming months:
Increase your cashflow
Bill early and bill often. Set up automatic late payment reminders. Send out
payments as soon as the project is completed. Track your time to ensure you are
fairly compensated
Reduce power bills
Consider alternative heating and electricity plans. Carry out an energy audit
and see how your utility provider stacks up. Turn off lights during the night
Charge an upfront retainer fee to ensure you get paid
Requesting a retainer fee upfront provides a cushion while you are working on
another job
Look at your phone/ internet plan. Can you do better?
There are dozens of different phone plans available these days, some offering
significant discounts and off-peak savings. Carry out an audit of your phone
and internet usage and find out what plans best fits your business' needs
Review your prices
When was the last time you increased your prices? With inflation rising it is
essential to ensure that these rising costs are factored into your goods and
services
Review your business location
Could you find a cheaper or more efficient work location? You may have been in
the same location for 10 years, but does it still make economic sense to
remain. Moving further out into the suburbs could save you thousands of pounds
in rent. The declining state of the property market may also open up `hot
deals'
Review transport costs
Is it time to trade in your old van for a more fuel efficient model? Do you
need to visit clients or could you set up a phone conference or have them visit
you? Use public transport where possible, rather than taking a taxi
Review marketing and advertising strategy
Could you better reach your customer base by email rather than mail drop? Does
that classified ad in the local newspaper need to be in full colour?
Seek free advice
The Federation of Small Businesses (FSB) recently launched a helpline for
struggling small business owners. The helpline is accessible via a freephone number,
which is 08000 193 633
