News : Valerie Moore

The credit crunch is moving from a theoretical problem on the financial pages to real world actions that can only constrain economic activity. The papers are full of doom and gloom, with crises in every sector and the recent problems with Northern Rock causing concerns throughout the banking industry. Interest rates to customers are predicted to rise and all the economists are predicting record business failures for the first half of 2008. Whatever you think, there is a high likelihood of this situation affecting you and your business.

The big question for you is, will you suffer from the anticipated problems or take advantage?

Listed below are a few tell tale signs that may seem unimportant in managing the business but which can have a huge impact on business performance and ultimately profits.

· Stagnant or declining sales
· Customer base not expanding
· Expenditure frequently over budget
· Few budget controls in place
· Gross profit margins being squeezed
· Unable to meet payments when they fall due
· Increasing value of outstanding debtors
· Poor systems in place to chase outstanding debts
· New suppliers requiring cash payments due to poor credit rating
· Cash flow problems – pressure on bank facilities
· High reliance on one or two customers
· Struggling to meet VAT/PAYE payments on a regular basis
· Suspicion of fraud
· Poor management information
· High level of product returns or customer complaints
· Running the business taking up more and more time and energy
· No business plan or unclear goals for the business
· Inadequate review or amendments to existing business plans
· Key staff leaving, high incidence of staff sickness/absence, poor staff morale

Any number of these issues can provide cause for concern and affect profits and the success of the business. Although realistically most businesses at some point will experience problems, the key is tackling these problems as soon as they are recognised. Holding regular management meetings to ensure the business is on track are extremely important and making necessary changes to rectify the issues. Equally important is getting advice early from external resources, for example, accountants, business advisers and insolvency specialists to ensure you are looking at the bigger picture and giving you and your business every opportunity to grow and perform in the future.

Should you require any assistance in any of these areas, Tenon Recovery are able to help you, please do not hesitate to contact Mark Liddle on 01202 554456/07831 607007.

Also there to help, of course, is myself or the team at Business Link – www.businesslinksw.co.uk

If you think you may have a problem this is no time to bury your head in the sand – if there is a business opportunity – grab it with both hands