Diversify your customer base
Relying too heavily on a single customer means that if they fail, you fail. Overnight, you could lose all of your revenue. Building a broader customer portfolio spreads your risk exposure, making it less likely for you to fail if one of them goes under.
But where do you start to find leads for your business? Creditsafe Prospects gives you a continuous pipeline of pre-qualified leads that have been credit checked, meaning you can close deals and onboard customers quicker.
Build a resilient supply chain
If there’s an issue in the supply chain, your operations can be brought to a halt. Regularly assessing the financial health of your key suppliers using a company credit report and develop contingency plans. Avoid relying on a single supplier wherever possible.
Review and update your value proposition
Sometimes, price increases are unavoidable. However, in a time where everyone has less money in their pockets, this can leave a sour taste in customer’s mouths. Understand where you sit in the market to find ways to enhance your offering, so that customers see the value in paying more.
Maintain a positive culture
Business resilience isn’t just about finances – the people who run the business are just as important. If a team feels overworked or at risk of losing their job, productivity suffers, which makes an already difficult situation harder. Encouraging open communication and supporting new ideas and innovation helps staff feel like they are a part of something important, improving productivity.
Tighten cashflow management
A detailed cashflow forecast allows you to spot issues before they become critical. By regularly reviewing cash in and cash out, along with expected fluctuations throughout the year, you can make smarter financial decisions.
Reduce overhead costs
Not all costs are within your control, but the ones that are should be reviewed. Renegotiate supplier contracts, review any subscriptions and the value you get from them, and assess whether your lease costs are still appropriate for the size and needs of your business.
Strengthen credit control processes
Regular credit checks lets you identify customers or suppliers who may be at risk of failure. Credit data can be used to adjust payment terms or request deposits up front.
Monitoring your current customers and suppliers is just as important, as circumstances can change quickly. Creditsafe Company Monitoring does this for you, sending you an email notification whenever there are any notable changes to the company. That way, you can mitigate any payment challenges or seek alternative suppliers if necessary.
For the most part, insolvency doesn’t happen overnight. By understanding the risks to your business and acting early, you can improve your ability to not only survive, but to thrive, even in uncertain economic conditions.