8 Ways to profit from and protect your business in an economic downturn

Here are 8 actionable strategies that focus on customers, reputation and credit management:

1. Recover your cash

This is the easiest and most obvious step to take. Afterall, you’ve already done the work so now you need to be paid for it. Have your AR/Credit management team focus on your due and 30-60 day debtors intensively. Anything over 60 days, refer to a reputable, licenced Debt Recovery Agency to assist you. This will not only keep the money flowing into your business but will allow you to focus on those early debts, before they become a problem for you.

2. Pay your suppliers on time

Keeping money moving in times of economic downturn is key to protecting not only your business, but your industry and those other industries that are connected to yours.
8 Ways to profit from and protect your business in an economic downturn

3. Don’t rely on one big customer

Easier said than done sometimes, but not having all your eggs in one basket will help futureproof your business. Look for new opportunities, sales are still key in time like this. They may not be at the maximum prosperity level, but certainly at a sustain level. As Simon Bowen, The Models Guy says, it is more important than ever now to make EVERY opportunity count.

4. Diversify suppliers

Are any of your suppliers likely to be affected by shipments being delayed/cancelled from overseas? Can you source the same products locally in the interim? Similarly to the reliance on one big customer, it’s important to not rely too heavily on one supplier.

5. Monitor your debtors’ credit activity

With credit monitoring services, you have the ability to be alerted in real-time when your debtor registers a significant credit event in the wider marketplace. This means that you’ll be among the first to know if they register a default payment or there are court actions lodged against them.

Businesses that don’t use a credit monitoring service have been blindsided when their customers quietly slip into insolvency. With credit alerts coming in daily, your business can act immediately to recover debts before the administrators move in.

6. Credit check new customers

It is vitally important you have an update to date credit application and use it to verify any new customers you bring into your organisation. Obtaining directors guarantees where possible also help protect your business in the long run. Also, ensuring your credit application has a cost recovery clause included will also help you in the event you need to use an external collection agency or instigate legal action to recover your debts.

Also, ensure you verify any trade references offered in the application. Are they friends, family or genuine suppliers? Most business owners are straight up, these measures help you in the instance you get caught out by one who perhaps isn’t. Also, trust your gut instincts, if it doesn’t seem right or you feel uneasy, listen to your instincts, do more checks.

7. Focus on operational efficiency

The current environment is causing a lot of businesses to look at different ways of operating. Some of the measures may end up delivering operational efficiencies to your business that can continue to be implemented when the environment changes. Take the time now to look at various parts of the business, what can be changed and/or introduced to deliver efficiencies that ultimately benefit the business financially?

8. Take advantage of government stimulus packages

The Australian Government, and several State Governments, have announced a raft of measures and economic stimulus packages that may be of benefit to you and your business. Research them and apply for those applicable. Use them to get you through the downturn, and the changes made to improve when the downturn is over.

For advice on anything to do with debt recovery, call AMPAC on 1300 426 722 or email us at sales@4ampac.com.au

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