It is indeed scary times for many small business owners. A colleague of mine last year advised several clients that if they think that administration or worse may be a possibility then they should sit down and develop a plan to position the business with a positive cashflow. If the business must make cuts then “cut once and cut deep”.
I encourage all businesses to develop a plan based around regular internal reporting. Ask the questions: What commitments are there over the next two weeks? What receipts can be counted on over the same period? Does performance match the budget (which means most need to set a budget)? How much risk is the business currently exposed to? What single event can cause a major cashflow crisis? Is there is steady trend towards reduced cashflow and capacity to meet commitments?
Act now but don’t knee jerk – implement systems to make sure the business grows by learning.
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
