Five ways to help your business beat the downturn

Geoff Rowley, client partner at Vantis Business Recovery Services, provides his top five survival tips.

Seize control of cash flow

The biggest headache for most managers and financial directors right now is maintaining a healthy cash flow. This is even more important as financial institutions become more risk-aware when reviewing overdrafts or loans.

Analyse the cash flow forecast and identify potential savings; can you accelerate cash receipts by offering early payment discounts? Could you talk to your key suppliers to seek pay-when-paid arrangements? Or renegotiate rent payment terms with the landlord? Can you restructure the business to reduce human capital costs?

Make the most of the balance sheet

Make sure the company's balance sheet is working hard for the business. A number of asset finance packages are still available that allow managers to free up capital previously tied up in assets, whether property, machinery, tools, vehicles or debtors.

Consider alternative methods of finance

In the aftermath of the banking crisis, alternative methods of finance have become more common, as institutions prefer to lend according to the shape of a business's balance sheet.

However, the lending criterion is more stringent and there is certainly more re-finance activity as opposed to new lending, making the sale and leaseback model popular.

Plug skills gaps

Are there any skill gaps in the management that could be filled by an interim manager? Is there a pipeline of new contracts in more recession-proof areas of construction? Are accounts up to date and audit proof?

Review the business operations

Businesses applying for re-finance today can expect tougher and more regular valuations, as well as needing to lay down a greater deposit.

Some lenders are also looking for additional guarantees from proprietors, or gearing up on other assets and, in some cases, where the asset valuation has been reduced but more funds are required, we are seeing the creative use of the small firms loan guarantee scheme to bridge this equity gap.