7 ways to protect your business against a downturn

At BPU we can provide businesses in the Cardiff area with advice and support on a wide range of business issues. This article suggests 7 ways to protect your business against a downturn.

Small and medium-sized businesses are particularly vulnerable to economic downturns. But all too often we see companies going under that could have stayed afloat if they had taken a few elementary precautions at the right time.

The right time to protect your business against a downturn is when it is relatively strong and you still have room to manoeuvre.

Here are seven steps you should consider taking:

  1. Don't rely on just one or two main accounts for the bulk of your revenue. Spread the risk by expanding your customer/client base.
  2. Maintain close communication with your bank and share your successes and failures with them.
  3. Reduce the debtor days on as many accounts as possible and accustom your customers to paying promptly.
  4. If you have to reduce spending, do so in non-core areas of the business.
  5. Examine ways to carry less stock without adversely affecting your core performance
  6. Don't lay off staff unless you really have to, especially those who provide ideas and inspiration. Use any downturn as an opportunity for key staff to develop new skills and coach newer members.
  7. The marketing budget is often the first casualty in a recession, but smart businesses continue to market through a downturn and position themselves to take full advantage of the upturn as soon as it starts.

If you are in the Cardiff area and are looking for support and help from experienced accountants and business advisers, contact BPU.

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BPU Chartered Accountants is the trading name of BPU Ltd Company number 3723948 registered in Wales. Registered to carry on audit work in the UK and Ireland and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales.

BPU Financial Solutions Ltd is an Appointed Representative of ValidPath Limited which is authorised and regulated by the Financial Conduct Authority. ValidPath Limited is entered on the Financial Services register (www.fca.org.uk/register) under reference 197107.

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