Very often the experiences of SMEs in a downturn are just not consistent with what we are led to believe. The bank balance is healthy (or at least OK), sure we are having to discount more, everyone is looking for a “deal“ but things could be worse. We are still very busy.

Just stop and think for a minute. Let me suggest as possible backdrop:

• Business activity has reduced so to try and maintain volume margins are squeezed by discounting.
• Purchases are down due to the slow down so Creditors have reduced.
• Stock (if this is a feature of your business) is being used to fulfill orders in lieu of purchases.
• Debtors are paying, later maybe, but paying.

All this change in activity can show itself in a better bank balance, initially. This can be euphoric but it can lead to a false sense of security.

It is essential to measure and monitor the level, type and profitability of sales or contracts and check the impact on the break even for the business.

If there is an adverse impact on the bottom line then corrective action must be taken and quickly.

Areas to consider for priority improvement are:

• Sales Conversion Rates.
• Sales Profitability.
• Cutting out Waste in ALL Processes.
• Get the Invoice out as soon as possible.
• Review Terms.
• Focus on Credit Control.
• Monitor Preformance Monthly, Weekly or Daily.

At Practical Partners we specialise in helping you and your people to do just that. Real Business Improvement through people first and processes.

For a free initial meeting to discuss the issues facing Your business call David Hudec on 07809 839 880.