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Johannesburg - If your small business has been hit by recessionary fallout, you can bounce back if you make the most of what you have.
The recession has taken its toll on the small- and medium-sized business (SME) sector, as is shown by a 20.3% increase in liquidations for the 10 months to end-October (compared to 2008).
The courts have closed down 3 264 firms, with the largest percentage in real estate (27%). The insurance and business services sector has also been hit hard.
Investec economist Kgotso Radira said figures show that companies will continue to be under strain. "Business conditions will remain challenging over the short term," he said.
Jannie Rossouw, senior manager at Sanlam Cobalt, has some suggestions to help ease the burden of small businesses.
Renegotiate terms with suppliers
If your business maintains a good payment record, it can place you in a favourable position to renegotiate the terms of your biggest providers. For them, a paying debtor or client is key to a positive cash flow.
This can benefit both parties with the supplier enjoying a paying client, while the small business may be able to maintain positive cash flows.
Barter with your products and services
The principle of bartering, or swapping, is as old as the hills. This happens when no cash or money changes hands, but goods and services do.
Smaller bonuses, more leave
One way to improve cash flow without disadvantaging staff is to negotiate a smaller bonus in exchange for extra days of paid leave in 2010. Make sure, however, that your actions are fair, acceptable to your staff and in accordance with labour laws.
Sell unproductive assets
Every business has white elephants which still hold value, but have fallen into disuse. You can advertise unused equipment or put it up for auction. This may give your business a welcome cash injection.
Create a learning organisation
In a competitive marketplace, employee skills can tip the scales in your favour and help close a transaction. Cross-train staff to fulfil multiple roles within the organisation.
- Fin24.com