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| How to Use Invoice Factoring and Survive the Recession |
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| Written by Phillip Evans |
| Friday, 13 February 2009 11:43 |
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Its official the British Nation is now in financial recession and businesses need to have a robust map to navigate this economic downturn or they are destined to go into administration. The challenging trading conditions over the Christmas and New Years holiday season saw an exceptional level of shops go into insolvency Retailers and Businesses that have already been bore the brunt of the recession and have had to go bankrupt are MFI the furniture retailer, Whittard of Chelsea, the specialist tea and coffee retailer. and Wedgewood the fine China and tableware manufacturer. Another victim of the recession has been our beloved Woolworths that went into administration just before Christmas and saw its final stores close on the 5th of January 2009, which has left 27,000 people facing redundancy. A business owner should be thinking how can I survive this economic downturn? The Turnaround Management Association says that for a business to achieve a successful turnaround it needs four things; a credible management team, a viable business core, a valid business plan and appropriate funding. British Business is now facing a Cash Flow pinch caused by the credit crunch and and freeze in the capital markets forcing Companies to search out alternative sources of funding As a business owner one of the first things you should do to survive a economic downturn is cut costs. Carefully review expenditure to identify any areas of your business where savings can be made. Look at distribution costs, advertising, marketing, business location and even the simplest things such as turning off the office lights at the end of the working day. Simple measures can give rise to immediate benefits for little or no pain. Cash Flow within a business is vital at any time but even more so in a recession and having access to working capital should be at the top of any business owners list. Funding a business with invoice factoring, which is increasingly popular for small to medium businesses. While not suitable for all Companies, the huge benefit of invoice factoring is that rather than have money tied up in invoices that are yet to be paid, you can receive an initial payment up front, typically 80% - 85% of the gross value, and the remainder when the customer pays the invoices to an invoice factoring provider, less the service fee which has been negotiated with them. However, if the customer defaults on payment, then the factoring company will recover the money provided to you initially from any further invoices which are factored. This can lead to random cash flow if customers are poor payers or they go into insolvency. About the Author: Invoice Factoring is provided by the Asset Based Lending team of Enable Finance Ltd. Enable Finance are professional corporate finance company providing UK business access to traditional and different types of credit. For a free consultation please contact the Business Refinance Team. Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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