There is no avoiding the issue the UK Economy is in recession and if you are a business owner you must have a plan to survive this economic slump or you will most certainly fail.
Tough trading over Christmas and the New Year period has seen an unprecedented number of high street retails go into administration or liquidation.
Stores and Companies to be effected by the economic downturn are Savvi the music retailer formerly Virgin Megastore, Adams the Independent childrens clothes retailer, USC the Fashion store and Whittard of Chelsea, the specialist tea and coffee retailer.
One of the most well know victims of the recession is Woolworths that went into administration just before Christmas. Its final shops closed on January the 5th, resulting in 27,000 staff loosing their jobs.
How can a business survive this recession? Well Alan Tilley of the Turnaround Management Association says that for a business to achieve a successful turnaround it needs four things; a viable business core, credible management team, a valid business plan and appropriate finance.
Traditional sources of finance have been restricted to very low levels due to the Credit Crunch and lack of liquidity within the money markets. This constriction of lending has brought about a Cash Flow squeeze on UK plc.
As an economy enters into recession one of the first thing a business should start consistently doing is keeping a tight rain upon costs. A firm hand upon expenses can save a business. Look at shipping costs, promotion and marketing, business premises and even the smallest things such as turning off the office heating at the end of the working day.
Cash Flow within a business is vital at any time but even more so in a recession and having access to working capital should be at the top of any business owners list. Funding a business with invoice factoring, which is increasingly popular for small to medium businesses. While not suitable for all businesses, the huge benefit of invoice factoring is that rather than have money tied up in invoices that are yet to be paid, you can receive an initial payment up front, typically 80% - 85% of the gross value, and the remainder when the customer pays the invoices to an invoice factoring provider, less the service fee which has been negotiated with them. However, if the customer defaults on payment, then the factoring company will recover the money provided to you initially from any further invoices which are factored. This can lead to random cash flow if customers are slow payers or they go into insolvency.
Tough trading over Christmas and the New Year period has seen an unprecedented number of high street retails go into administration or liquidation.
Stores and Companies to be effected by the economic downturn are Savvi the music retailer formerly Virgin Megastore, Adams the Independent childrens clothes retailer, USC the Fashion store and Whittard of Chelsea, the specialist tea and coffee retailer.
One of the most well know victims of the recession is Woolworths that went into administration just before Christmas. Its final shops closed on January the 5th, resulting in 27,000 staff loosing their jobs.
How can a business survive this recession? Well Alan Tilley of the Turnaround Management Association says that for a business to achieve a successful turnaround it needs four things; a viable business core, credible management team, a valid business plan and appropriate finance.
Traditional sources of finance have been restricted to very low levels due to the Credit Crunch and lack of liquidity within the money markets. This constriction of lending has brought about a Cash Flow squeeze on UK plc.
As an economy enters into recession one of the first thing a business should start consistently doing is keeping a tight rain upon costs. A firm hand upon expenses can save a business. Look at shipping costs, promotion and marketing, business premises and even the smallest things such as turning off the office heating at the end of the working day.
Cash Flow within a business is vital at any time but even more so in a recession and having access to working capital should be at the top of any business owners list. Funding a business with invoice factoring, which is increasingly popular for small to medium businesses. While not suitable for all businesses, the huge benefit of invoice factoring is that rather than have money tied up in invoices that are yet to be paid, you can receive an initial payment up front, typically 80% - 85% of the gross value, and the remainder when the customer pays the invoices to an invoice factoring provider, less the service fee which has been negotiated with them. However, if the customer defaults on payment, then the factoring company will recover the money provided to you initially from any further invoices which are factored. This can lead to random cash flow if customers are slow payers or they go into insolvency.
About the Author:
Debt Factoring is provided by the Asset Based Finance team of Enable Finance Ltd. Enable Finance are specialist corporate finance company providing British business access to traditional and alternative sources of finance. For a free consultation please contact the Business Refinance Team.
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