Survival Project Guide

Wednesday, August 4th, 2010 at 1:55 am

How to avoid the pitfalls of economic recovery - a guide for business growth

As more signs of economic recovery are increasingly apparent, now is the time for small businesses to plan carefully for the recovery after the recession, in order to maximize the market recovery.

seem to sprout green buds with increasing regularity as we enter a new year, while the stock market continues to gain ground, economic indicators are beginning to look positive, the growth seen in neighboring economies and merger activity and appears to be increasing. But some clouds are very dark on the horizon, including the series of tax increases for the coming months, rising unemployment and cuts in government spending likely. However, many companies is looking to grow again, wanting to get their businesses moving forward after nearly a year of economic slowdown, but even that can be dangerous because historically companies tend to go to exit bankruptcy during a recession. With this in mind, Orchard Growth Partners said Principal Antonio Doggwiler some simple steps that companies should take if they want to avoid the pitfalls of recovery and are given the best opportunity to enjoy the "Profit after pain. "

Successful businesses have started in a recession

Received wisdom says that a recession may be a good time to start a business, and there are many companies that support this point of view, Microsoft, CNN, MTV, Hewlett Packard, Burger King and GE (General Electric), all of whom began their journey to world domination in an era of economic depression (GE began in 1876 during a recession in six years, for those with memories that do not go back so far.)

Learning from the big business that began during a recession

There are a number of reasons why new businesses succeed in difficult times. They tend to be much more focused on what the customer wants and values, and much better in exploiting market gaps left by their competitors weak or disinterested. They maximize the availability of resources and talent that are available during a recession. At first, during a depression, tend to be much more difficult for companies that benefited from the boom conditions during their development stage. They know that the time is right for them and their products, and are willing to struggle to succeed. More importantly, they are not inhibited by their past, and are able to think in new and innovative ways serve its market.

It therefore seems logical that existing businesses should look to learn why new businesses thrive when planning your escape recession. Many companies have already had to rethink how they do business as the recession has taken its toll on profits and cash. However, there is a difference between surviving on the basis of its current business model and reposition yourself in a way that will achieve real growth in the business climate improves. Companies will have to show real leadership, communication and management to enable them develop growth strategy right, which is duly planned and funded and has the best team of people to run it if you enjoy "profit."

business planning can be flexible and dynamic, non-intimidating

For many small and medium enterprises planning can be daunting, and is something that often only be undertaken when funding is required. It is also associated with the highly politicized budgeting process large company that caused many people to flee to the companies more entrepreneurial. However, a proper dynamic planning process, which is very flexible and reviewed periodically and against which progress is monitored, is essential for any business looking forward.

A good plan, and any investor who has to read hundreds of poor business plans will tell you, refers to product, market, customers, competitors, people and finances. It does not contain a projection hockey stick showing how everybody will be rich in a couple of years. It contains real analysis of the marketplace, customer needs and willingness to pay, the details of why and how the management team will deliver, and an understanding financial consequences, both long and short term.

Consider the value of investing in your business team

When considering people ask, it is important realize one of the key reasons that people invest is the quality of the management team. Consider the word team. You can mount a brilliant collection of talented individuals, but, as any number of sporting examples show if you do not have the right combination of skills and abilities, not operating at their full potential. Understanding and management of people in the organization is essential to maximize business opportunities.

Striking the right balance between the powers such as sales, finance and operations is important, and impossible, even in small businesses. If you are unable to employ full time someone (something that is very risk, the best), then take full advantage of the flexibility that currently exists, especially given the number of quality has been obtained as result of the recession. At the very least mark used by people with experience as consultants, non-executive, mentors and coaches.

Management financial assistance for small businesses to care!
And finally, despite previous observations, finance does not matter! It is a fact that companies that grow after of a recession tend to run out of money because they often take too many commitments and focus on working capital management. While long-term aspirations are significant returns for investors, management of working capital and selling profitably is the key to business survival. It is a concern, rather to be light and robust, many companies just half and cut everything back to the bone, which could leave them more stretched in trying to re-grow.

The Basics financial management remain critical. Understanding how the financial and business where profit and cash generated, regular cash flow and forecasts to date management information with key performance indicators and early warning systems not only improve the chances of business survival, but also provide evidence of possible sources of funding that a company is likely to give financially.

It's getting better, but be prepared
The past year has been hard, but maybe more companies have survived what might have been expected. There are indications that a turning point has been reached, but there are some clouds on the horizon. Therefore, you can not rely on economic growth alone to grow a business. Coming out of a recession can be a dangerous moment, but if a company planned properly, keep learning and development, remains flexible, brings out the best of their people, guarantee their products and services continue remain relevant and adheres to the basic concepts in managing their finances, there is an excellent chance that will be achieved "gain after the pain."

About the Author

Antony is a highly commercial qualified certified accountant with over 25 years experience of financial and general management gained in a variety of industries with both large and small companies.

Antony joined Orchard in May 2006, since when he has worked with a number of organisations, including owner managed growing businesses, private equity groups and multinational subsidiaries. Projects that he has worked on include fund raising, strategic planning, reporting and systems development, profit and cash flow analysis, M&A, business risk management and compliance Sectors covered have included retail, manufacturing, consumer goods, IT software services, health care, waste management services and leisure. His unique combination of business, sector and cultural skills, developed in both big and small company environments, has enabled him to add value in ways that go beyond the finance function. He is particularly interested in working with business looking to establish operations in the United Kingdom, or UK businesses looking to expand overseas.

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