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DON’T PANIC By: Gordon

You may feel that the economy is travelling in a downward direction pulling your business with it.

But don’t carry out any dramatic changes to respond to what is probably a short-term difficulty. Stay with the policies that worked when the economy was in your favour.

Reducing prices or fees is not a recommended method of increasing business levels – price cutting or margin cutting can devastate margins and undermine your long term image for quality. Continue with what you are good at – add value without being cheap. Chasing business by pricing low is not a sustainable model as there is always someone cheaper.

Consider other options. Look at your costs, there will always be costs that you don’t need when you take a close look at your expenditure. Use this time to make staff redundant who you feel add nothing to the business. In the good times redundancy is difficult to justify – with difficult economic conditions the process is easier to manage and justify.

This may be a good time to reduce costs but never reduce standards as this can lead to a damaged brand and reputation. Concentrate on cash, it may be much more important than profit as you need the cash flow to take advantage of opportunities once the next upturn arrives.

Haxton, Chartered Accountants for West London, are here to assist you with strategies to ensure you survive the current negative forces in the economy.

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