SB: Coping in a recession

vivatifosi

I don't recall seeing this mentioned, but I wondered if we should start a coping in a recession thread where we can bounce ideas off and support each other?

In the last couple of months the problems I have encountered have been a softening in business, coupled with longer payment terms with my clients.

I've worked through two recessions (though not as a business owner) and am sure that in the spirit of the MSE community there are many things we can do to help each other, whether through ideas or just someone else understanding the pain!

What does everyone else think?

jhp

Make sure you hold on to your best customers.Obvious but often overlooked in the pursuit of new business.

COOLTRIKERCHICK

jhp wrote: »

Make sure you hold on to your best customers.Obvious but often overlooked in the pursuit of new business.

this is so true.... dont take it for granted that just because a customer/client has been with you for a long time that they can be relied on or taken for granted, as jhp as rightly said...by trying to chase for new customers your service and attention could slide with yuor old ones...

plus just my thought... and my way of thinking.. in these times be more cautious with new customers.. as they could be using you as they have financial problems with their other suppliers.. and cant get credit etc... just be extra carefull and tthorough with those checks..

good thread...even if one business gains by one thing an mse'r has posted...it will be a sucess....:T

Petmidget

Market your business, previous recessions have shown those who market themselves well during a recession will increase their brand awareness massively. The reasoning being people think they are brave spending money in this climate. You also will find it more easy to take the customers off the envitable failures among your competitors.

Remember that failures among your suppliers are just as much of a risk as non payment by customers. Businesses are a chain, protect yourself as much as possible against a domino effect, spread your supplies even if it costs you more, dont rely on 1 main supplier.

If a customer who has previously paid on time starts to pay late, alter their terms. BE HARSH. You are in business for yourself not to be a charity, nobody wants their business to fail, 90% of failing people will try every desperate measure possible to keep going even after the writing it on the wall, this will mean taking every scrap of debt possible and just plain lying to get supplies.

Move them to CoD, or just plain drop them. Which do you need more, their business which you wont get paid for, or spend that time on serving a new or existing still good customer.

Overall watch the people round you like a hawk for problems, things move very fast in this sort of environment, you cant afford literally to get caught napping.

vivatifosi

Thanks everyone, great comments so far! I was offline yesterday because I rent a unit that I don't need, so was saving money by moving out.

Another thing companies should look at is having a good spread of customers (ie a healthy 'concentration ratio'). In the industries I have worked in I have seen what appeared to be good, healthy businesses fail because they did not have a sufficient breadth of customers. Its worth asking how much of your business you get from your biggest customer, biggest three customers, biggest 5 customers etc, and how vulnerable you would be to the loss of their custom if they stopped buying. This is particularly an issue for people selling business to business as client bases are likely to be more concentrated to start with.

Savvy_Sue

jhp wrote: »

Make sure you hold on to your best customers.Obvious but often overlooked in the pursuit of new business.

As a customer rather than someone running a business, I'd thoroughly agree with this. If I've had good service somewhere, I'll always go back there next time I need the same. Even if I anticipate paying a little more for the service ...

dcon_blue

I'm not sure if I'm posting on the right thread ... apologies if I'm not ... but I could do with some help and advice.

For the past four years I have 'employed' myself through my own Limited company and take contracts from clients that typically last 2/3 months (or more if I'm lucky).

I've just finished some work for one client (two lots of two weeks work ... two weeks gap in between the two bits). I've been paid for the first lot and have just put an invoice in for the second.

Although I had one days work in July ... before this bit of work hadn't been working (or should I say 'earning') since May when I finished a nine month contract (it started as a three month contract but it rolled into nine months).

Anyway, throughout the three barren months (June/July/August) I managed to cover my minimum wage (and very modest dividends) but I am now getting quite worried now that I'm out of contract again and given the current economic climate.

In the 23 years I have been working I've never claimed any benefit of any kind but I was wondering if I could 'sack' myself in lean times and claim jobseekers allowance? (I would actively welcome employment if anything suitable came along). Then if my Limited company gets a contract I could re-employ myself.

I'm single and live alone and although I have savings my credit cards cancel these out (aka stoozing :j ) and I have a repayment mortgage.

So ... to repeat my question could I claim Job Seekers Allowance?

Thanks

dcon

Savvy_Sue

It's a complicated question, and you might be as well contacting a Job Centre to ask it.

The answer will firstly depend on whether you've paid enough of the right kind of NI contracts in the right contribution years, but secondly will be complicated by the notion of 'sacking' yourself.

If you're sacked from a job, or leave it voluntarily, the Job Centre can apply a sanction against you for up to six months. This is to discourage people from getting themselves sacked or walking out if they're just fed up.

Now, you could argue that you're making yourself redundant, but if you're doing that then you'd have to pay yourself redundancy pay, PLUS if there's only you as an employee that would kind of indicate that the business was being wound up.

I suspect the answer is going to be no.

So, if you're willing to get other work, you should perhaps concentrate on a) generating new contracts and b) doing some other work to help you get by.

vivatifosi

I agree with Savvy_Sue. Why not phone up the Job Centre, say that you'd rather not give your name at the moment and explain your situation? It may be that they can give you other help, even if it isn't financial.

It may also be worth speaking to your local Business Link, as other companies will almost certainly be facing similar problems and I don't believe for one minute they aren't being asked the same question regularly.

Also, as Savvy_Sue said, look at other jobs that could get you money in to supplement your company. For example, you could get a weekend job in retail, as a library assistant, the Post Office is advertising for people to help with delivery up to Christmas. Not glamorous, for sure, but they are the sort of jobs that you could fit in around other commitments should work pick up.

You could also try speaking to your regular contacts or other companies with similar needs. You may find that it is hard to gee yourself up to find new work when you're feeling a bit down, but even in a downturn, it is extremely rare for a market to collapse entirely, so there is probably someone, somewhere who has a need for your services, you just haven't spoken to them yet. Under the current market they may consider taking on a contractor rather than an employee if they feel they may need to lay that person off six months down the line.

Pennywise

Yes, you can sack yourself and claim JSA. They take a lot of persuading and you need to be prepared to give them a lot of information relating to your company, etc., but with a bit of persistence you should get it. The main thing is that you have to persuade them that your company CANNOT continue to pay you, i.e. that your company has run out of money, not just that it doesn't have any work at the moment. So if the company has reserves, you need to use them to continue paying your wage in the first instance. Only when the company's funds have run out, can you issue a P45 and take it along to the JobCentre to sign on for JSA. Be prepared to show them your company accounts, bank statements, etc., to prove your company is barren!

abd08

We too are having problems with some customers and payment...

Can anyone recommend a credit checking agency which they personally use and trust?