Tips to consolidate rather than capitulate?

Business Systems Specialist, Tamara Simon says many businesses need to take a different view of the GFC to ensure they are still in business in 2011.

In light of the current Global Financial Crisis (GFC) and the constant media bombardment, I think you could be forgiven if you were feeling a bit depressed, negative or maybe just gloomy.

For those in business, life has possibly gotten a bit tougher (and maybe a bit quieter); with many trying to determine how long the GFC will last, what marketing strategies to maximise, and can they ride it out with hopefully their current staff levels in tact.

In addition, the Federal Government’s Stimulus Package hasn’t assist many small businesses, summed up I believe quite well by Joe Hockey, Shadow Treasurer on ABC’s ‘Q&A’ show - Thursday 19th February 2009.

“Small business is not getting any incentive at the moment to continue to employ people when they're seeing fewer and fewer customers come in the door. You can have all the tax concessions you want for small business, but if small business hasn't got customers and if small business can't borrow money from banks, then small business isn't going to be able able to afford to buy new equipment.”

So businesses have two choices

1. Increase Income

2. Decrease Expenses

Simply having money in the bank account to pay the bills now doesn’t ensure long term viability and sustainability – nor does it identify the business as successful, merely surviving or treading water.

However for many, increasing income is not an option because the market is deciding not to purchase their services, let along pay a higher premium than in the past. So the only viable option is to reduce expenses to keep your doors open while we see out these uncertain times.

Because it will get better (or back to what normal growth and productivity should be), rather than the wave of prosperity we’ve been riding for at least the past five years. We just don’t know when it will get better.… but businesses need to be ready when demand returns.

As reducing salaries should be viewed as a last resort, here’s some other avenues to first consider, at least in the GFC.

• Order stationery monthly rather than ad hoc

• Not provide tea, coffee, milk for staff in the short term

• Maximise onsite visits – plan multiple sites in one day rather than separate trips

• Review financial delegations of staff to ensure no unnecessary/unauthorised spending

• Review bank fees and charges – consolidate accounts/loans

• Short term freeze on salary increases

• Review telephone/mobile phone plans to get the best deal

• Shop around for all purchases – look for discounts

Cashflow areas to consider

• Invoice clients as soon as work is completed rather than simply at the end of each month

• Introduce deposit and progress payments

• Offer payment plans/discounts

Finally, use this time to review your systems and develop your templates to ensure they are not an additional expense item because remember…

REWORK = TIME = MONEY

So isn’t it time to Take Another Look to see whether your systems are putting your business at risk.

Tamara Simon was a Queensland Finalist in the Telstra Business Women’s Awards. With extensive experience in over 10 industry sectors including building design, training, auditing and marketing, she is passionate about helping build profitable and sustainable service-based businesses. Take Another Look at your business , people and systems to build sustainable profits.