It is no secret that the economic boom in Australia has well and truly cooled down, and now many businesses who rode the wave of economic prosperity during that time are faced with a more grim future. A slowdown in economic activity is always going to be bad for businesses, but with the right management and advisory, you can reduce the effects of the slowdown.

So, that being said, here are my Top 10 Tips for Tough Times…..

1. Review creditor payment terms…. Don’t pay too early but don’t pay too late;
2. Review aged debtors – send out regular debtor statements, follow up older debtors, if doubtful, offer payment terms as an alternative;
3. Review banking covenants and Director Guarantees; ensure you’re not being over exposed to excessive guarantees. Meet your bank and be proactive;
4. Review your Sensitivity Analysis to market changes such as movements in ASX, forex fluctuations, changes in the economy (both domestic and global);
5. Staff retention – introduce incentives for high performers. Retention of good staff in tougher times is important;
6. Review staffing requirements and levels. Can you reduce your staffing? Redundancy? Do you need as many staff during quieter times?
7. Changes in market conditions brings opportunity ie. What are your competitors doing right now? Cash is king;
8. Review spending and tighten where necessary. Micro manage economic and financial resources;
9. Manage your cash flow carefully, shorten your budget periods – prepare and/or review budgets for 3, 6 and 12 months;
10. Consider bringing in new equity partners, such a move can potentially reduce debt.

Those are my Top 10 Tips, what are yours?