Surviving a Recession with Bookkeeping
There are ways to prepare your business for the recession ahead. They’re easy to implement, and they can have a big impact on your ability to weather the storm.
1. Tighten up your fixed costs
Your fixed expenses stay the same each month so are the minimum you need to earn to keep your business going.
Fixed utilities (ie. internet, phone)
Fixed interest payments
Rent: In the interest of keeping long-term tenants, some commercial landlords may consider reducing or deferring rent payments. But they may not offer one unless you ask.
Tax: HMRC offer the possibility of setting up payment plans so, even though you need to pay your taxes you have more cash to work with now.
Are you able to switch to a cheaper phone plan or agree to share wi-fi with a neighboring business.
2. Reduce your variable costs
Variable costs change month to month.
Cost of raw materials
Per-piece labor and hourly wages
Distribution (shipping, restocking)
Utilities (tied to how much you produce)
Variable costs are harder to predict than fixed ones but you can cut variable costs as they occur. You may be able to save money by buying retail items in bulk and selling them intermittently throughout the year, rather than buying on an as-needed basis.
3. Refinance debt with low-interest loans
Refinance your debt and lower your recurring interest payments. Pay off what you owe with a low-interest loan, and you’ll immediately have more available cash flow each month. And, in the long term, you’ll be paying less to borrow.
Bookkeeping may be the last thing on your mind but remember what up to date books do for you.
Financial statements let you monitor your business, find ways to trim the fat, and anticipate problems.
It’s easy to get overwhelmed. But be careful that your regular day-to-day routine doesn’t slip. Falling behind on bookkeeping now could cost you important insights into how your business works.
A good bookkeeper can help make sure you’re prepared.
📣I am here, and would be delighted to talk with you about an affordable way I can take the pain out of your bookkeeping and help with your business 📣