In a recent business angel blog, I suggested that now was actually a good time to start a business. I do though have some general words of advice for managing through the current turmoil.

My advice for businesses would be

1)     Have a great relationship with your bank manager. Banks have contracted balance sheets at the moment and will be cutting down on their lending and will be looking to offload loans to any business that looks uncertain. (My fund is certainly benefiting from this!). You really do need to try and have a great relationship with your bank. Keep them in the picture at all times. Ask for advice, explain your plans (but be cautious not to reveal bad news without having solutions to offer) and make them feel ultra comfortable. On the commercial side of banking, you will be amazed at how much authority individual managers still have.

2)     Preserve cash. Cash is always king - but at the moment it is the Emperor! Really hold on to as much cash as you can. Manage your outflows and cut down on anything other than vital spending.

3)     Do not cut back on sales or marketing spend. Customers need to know that you are out there. Advertising makes a bold statement about your belief in your business and the future. I consider it a vital spend for any small business. What you do have to do is be certain of the return on investment on marketing activities. This is what I like about Google advertising. Because of the downturn you can also get great deals on placing adverts.

4)     Make sure your service is as close to a mandatory spend as possible. The items that will be cut back on over the next few months will be discretionary spend. There are simple exercises you can carry out (email me for them) to get your service moving away from a pure discretionary spend towards a mandatory spend.

5)      If it is a discretionary item or service, make sure it is really clearly defined. What exactly is the consumer getting through purchasing your service? Clarity is what you need to sell easily. I am amazed at how complicated so many businesses make it to understand what they are selling and who they are aiming at.

6)     Develop nerves of steel!

Best of luck!

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