The worst thing local businesses can do in the ‘new GFC’ conditions tipped for 2012 is ‘just try’ to survive. So, here’s some expert tips for surviving an economic slowdown.
According to Vantage Performance group managing director Michael Fingland, 2012 is shaping up to be a challenging year for Australian businesses.
To prepare for what may be tougher than the original GFC aftermath, Fingland says that businesses need to do more than ‘just survive’.
“The worst thing a business can do is approach this period with a “bunker down” attitude.”
“You need to treat tough times as an opportunity, and be doing something different to stand out from the competition so you can continue to grow and source capital to fund the business,” he added.
To survive the economic downturn, Fingland provides these helpful tips:
1. Don’t just compete on price when things get tough.
2. Be unique, have a real point of difference from other competitors.
3. Aggressively manage accounts receivable, inventory and payables and consider selling non-core assets/divisions or surplus assets.
4. Consider sale and leaseback options for property and other assets to bolster cash flow.
5. Consider a merger in order to not only survive but come through the next period in better shape than your competitors.
6. Focus right now on stress testing your business
Businesses are also being urged to develop risk management strategies to cope with fast changing conditions.
“Regardless of the position your business is in, it’s essential to be undertaking detailed financial modelling and “what if” scenario testing to gauge how various sudden changes in market conditions will affect your business,” Fingland said.
Stress testing will help businesses to minimise risk, maximise opportunity and show financers they are prepared for and able to handle challenges.
“Those businesses that are able to adapt to change are the ones that will prosper in the future.”