A lot of people seem to think that the Government’s Enterprise Finance Guarantee scheme is dead. It isn’t.

Working on an acquisition for a client we were looking for the best deal, as always.

Despite a lot of bad press about the banks we have been able to secure the support of a high street bank under the Government’s Enterprise Finance Guarantee scheme whereby the bank is only liable for 25% in the event of default.

It’s a relatively small transaction but still requires a comprehensive and extremely robust business plan, three years financial forecasts – cashflow, profit & loss and balance sheets – and a plethora of peripheral documents.

It’s a lot of work and the cost to the client is high in percentage terms compared to the loan, but sets the expanded business on the road to further growth and probably more acquisitions as the increased turnover and future profit far outweighing the initial cost.

It just shows, if you know where to look and how to put a good plan together, there is still money available from the traditional sources.

More money by Adam Hawkins http://anodizeproductions.com

So the recession is officially over.

Hooray!

Now for the really hard part – surviving the post-recession downturn that most pundits expected and most firms are now experiencing.

Strong leadership can make a huge difference to success or failure – never more so than today, so here are some things to consider:

1. Understand the big picture in your industry or sector – be sure of the true position.

2. Adjust sales forecasts to accurately reflect the true circumstances. Review every month.

3. Cashflow must be maintained, but it’s catch 22 because that can take resource away from sales and other vital activity. Deploy your people to be effective TODAY.

4. Target cuts carefully – at waste rather than core activity.

5. Keep an eye on the future – don’t act precipitously. Short term cost savings can result in being under-resourced when the upturn comes. Judgement is crucial.

6. Focus on customers – understand and try to help resolve your customer’s problems.

7. Innovate. If cashflow allows don’t stop all R&D. New products and services will help boost turnover and profit when markets improve.

8. Look for opportunities. Asset values are low and research by McKinsey & Company shows that effective acquisitions during a downturn “created significant value”.

9. Motivate. Make certain that you get staff on your side to retain the best and make sure they don’t leave as soon as the jobs market improves.

10. Action. Don’t be paralysed by fear, focus on your USP and take appropriate action.

Anything you’d like to add ? Leave your comments below ….

One of the essential activities of a healthy business is good credit control. The old business saying is: “Turnover for Vanity, Profit for Sanity” but the last line: “Cash is Reality” is probably the most important, so here are some ideas on credit control and collection strategies. Most of these may seem like common sense but we are always surprised about how few of these suggestions are actually put into practice. Adopting a co-ordinated strategy can often bring about a swift and significant improvement.

Six quick tips to improve cashflow:
1. Appoint one person to be responsible for debt collection – make it a priority within their role.
2. Credit check new customers and set credit limits, stick to them.
3. Make it clear when invoices are due for payment.
4. Send invoices promptly as soon as work is completed.
5. Send reminders when payment is due and again a week later.
6. Make sure the paperwork is supported by a call and ensure you get agreement on a course of action. Always follow-up.

If that doesn’t work and you get into a position of having to recover debts, here’s some help:

Six point debt recovery strategy:
Have a plan for recovering late payments – especially from regular offenders
1. Send regular statements.
2. Call to confirm the due date and that a payment will be made on schedule.
3. Establish a one-to-one relationship with whoever is responsible for arranging payment/drawing the cheque/authorizing the cheque run.
4. If you can’t get a commitment to pay, make it clear when you will call again. Don’t be put off by excuses, get agreement to a course of action. Make sure you call on schedule.
5. If all else fails, send a 7 day letter with a copy of the invoice, making it clear what action will follow if they do not pay within 7 days. Never make idle threats.
6. If all else fails, Instigate a claim through the County Court. The procedures are not too difficult and you do not need a solicitor.

Often the issue of ‘official’ documents from the court will be enough to guarantee payment. Few credible businesses wish to gain a bad credit rating following a County Court Judgment.

Using the personal touch is perhaps the most important part of any credit control regime. Make sure that when you call, the debtor already knows who you are, which business you represent and why you are calling. Creating a one-to-one relationship with the person responsible makes it easier to put your case strongly. If a company is struggling to make payments you need to make sure yours is at the top of the list!

We’ve got a great track record of helping companies to become more profitable but finding out if a consultant suits you can sometimes be a costly business so we’ve found a source of funding that may mean you don’t have to risk your own money on finding out how good we are.

If you’d like to see if we can help you to make more profits just give me a call on 01480 830282.