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This is MoneyHSBC say all of 275000 payments missed in computer meltdown are now processedThis is MoneyIt's typically used for making regular payments such as salaries, pensions, state benefits and tax credits - almost 90 per cent of the UK workforce are paid using Bacs direct credit, figures show. More than 150,000 UK organisations currently use it ...and more »
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Surviving the Recession


In March this year the Federation of Small Businesses reported that there was little sign of the economic downturn hitting order books; that the number of start ups was up; that manufacturing was seeing a bit of a renaissance; and there was no trickle down effect of the Credit Crunch.17-04-2009
What a difference 6 months makes. At the beginning of September the head of Small and Medium sized enterprise analysis at Barclays predicted that there would be 150,000 fewer SME’s in England and Wales by early 2010 because as more close down and fewer start up. And now - at the beginning of October those figures look optimistic. So how do you make sure your business survives a downturn that looks like being both deeper and more protracted than anyone imagined?
Even in the good times around a third of SMEs close after two to three years and that number is likely to go up substantially. It’s getting harder to raise money because house prices are falling and the banks are reluctant to lend. If you do get behind with your payments lenders are becoming more likely to pursue you and big firms are squeezing their smaller suppliers - demanding price cuts and paying invoices later. Paul Mullins who runs Business Debtline which advises small business owners on how to deal with their debts, says the number of calls his staff is dealing with has doubled in the first 6 months of 2008 and the number on the edge of failure is 50% up on this time last year.
But Alistair Tait of Tait Enterprises Development Ltd says enterprise is more important than ever in an economic downturn. Your country needs you! He says now’s not the time to sit tight and hope to survive the raging storm; it’s time to improve performance and put yourself in a position to get ahead once the tide changes.
Don’t panic: go through your finances checking what you have to pay out; what your order book looks like; and what you’re owed. Get the facts and then worry!
Where you can make savings? Staff? No one likes to make people redundant but some firms tend to over hire in the good times. Could you hire people as you need them on short term contracts? Rationalise your stock; renegotiate your contracts with your suppliers; hire better people at lower costs.
Are you spending on things that don’t make a real difference - travelling to meetings instead of phoning or using video conferencing; using expensive business premises when you could work from home? Sadly the Christmas parties may have to go but make sure your staff know you appreciate them. If you lose them it can be hard to find good skilled workers when times get better. You can save money with energy efficiency measures and reusing and recycling. Replace your fleet of cars with bicycles if possible.
Maximise your productivity. You need to sell product. You need customers. Spend more time with your customers finding out what they need and what will keep them coming back to you. Work on ways to sell more to existing customers. How will you get the biggest return for time spent?
Get to know your customers and keep their data - with their agreement, securely and only for your own use. Who are they? where to they come from? How did they find out about you? What did they think of your service? What would they like you to offer that you don’t what would make them come back to you? It’s cheaper to keep existing customers than to find new ones.
Know who your competitors are and what they’re up to. In the downturn more people become unemployed and some will set up businesses. You can find more people doing what you’re doing and chasing less demand. Having a competitive advantage is even more important in recession than in a boom. Compete on service and quality.
Cutting prices isn’t the only way to increase demand. Can you make your product more attractive without a lot of extra cost? Could you deliver? Delivering to local customers on your way home would cost you no extra but would add value. Or if you already deliver could you be more flexible - deliver when your competitors won’t. Could you attract customers with special offers?
Don’t forget that not everyone will spend less and those who do may cut back on other products and buy your instead. We may eat out less but buy more treats to eat at home.
If you’re lucky enough to be able to invest get ahead of the game for the upturn. Can you buy new stores or premises; revamp the ones you have; recruit talented people others have let go; invest in better services maybe even with more staff? Reduce the odds of sales going down and lead the recovery.
You do have to make sure you get paid on time or your cash flow will suffer - but the reason that’s not at the top of the list is that sometimes people put so much effort into this that they don’t do any of the rest. Is there as much money in the bank as there should be? Make sure you have a good financial control system and controller who chases up invoices, makes sure they’re paid on time and closes orders to non-payers.
Stop using expensive advisers and use the free services available such as the Health and Safety Executive, the Federation of Small Business if you are a member; the government’s small business service of Business Links at www.businesslink.gov.uk and if you are facing a problem get help sooner - don’t wait - call Business Debtline on 0800 197 6026. Paul Mullins says his free service has a good record of helping people to stay afloat. 
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