By Adrian Kirby
Through his private equity company Ravensbourne, Adrian Kirby helps turn around the fortunes of struggling businesses.
He has first hand experience of the toll the recession has taken on small and medium-sized businesses. But coming out of the downturn can be an equally financially risky time, and here he gives his top tips on how to survive.
While signs of a recession coming to an end are always welcome, there will be new challenges to overcome. Company finances can be put under enormous pressure during this time and it’s important your business is prepared.
Orders can go up, but often in lower quantities (for the same sale price) with shorter deadlines demanded. Business supply chains can empty out quickly, which leads to shortages.
Companies may also need to increase staff and other resources after having cut back during the downturn. All of these factors are likely to increase costs and negatively affect cash flow.
Don’t ignore the situation
Compounding the problem is tighter credit from the banks and suppliers and a demand for quicker payments.
My advice is not to ignore the situation, and if necessary get external specialist advice. Consider all the options before committing more of your own cash or borrowings.
Borrow and use other people's money when possible, but do it wisely. Look inside your own business for resources.
Don’t be afraid to ask for help
Recognising the situation and planning your way through the economic recovery can be the difference between a business that makes it to a brighter future and one that doesn’t. Do ask for expert help, it will cost a little, but can make all the difference.
Adrian Kirby heads up private equity firm Ravensbourne, which specialises in funding small and medium sized businesses.
If you would like to know more about Adrian Kirby, you can visit his website.