Riding Out the Recession

1
Riding Out the Recession

• Business Recovery and Cash Flow Management
• Brian Denton iems ltd

2
Business RecoveryIntroduction

• Why do businesses start?

3
Business Recovery Introduction

• Why do businesses start?
• It is a strength to recognise that external help
  is needed, not a weakness.

4
Business Recovery Introduction

• Why do businesses start?
• It is a strength to recognise that external help
  is needed, not a weakness.
• Why do companies get into difficulty?

5
Business Recovery Introduction

• Why do businesses start?
• It is a strength to recognise that external help
  is needed, not a weakness.
• Why do companies get into difficulty?
• The key to successful business recovery is to act
  early as soon as a problem is identified.

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Business RecoveryThe Process

• Initial assessment of the companies position.

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Business RecoveryThe process

• Initial assessment of the companies position.
• Analysis of the companys present financial
  position.

8
Business RecoveryThe process

• Initial assessment of the companys position.
• Analysis of the companys present financial
  position.
• Develop an understanding of the nature of the
  problem/s that the company has and the
  consequences.

9
Business RecoveryThe process

• Initial assessment of the companys position.
• Analysis of the companys present financial
  position.
• Develop an understanding of the nature of the
  problem/s that the company has and the
  consequences.
• Develop a plan to deal with the problem/s and its
  consequences.

10
Business RecoveryThe process

• Initial assessment of the companys position.
• Analysis of the companys present financial
  position.
• Develop an understanding of the nature of the
  problem/s that the company has and the
  consequences.
• Develop a plan to deal with the problem/s and its
  consequences.
• Prepare a financial plan comprising PL, Cash
  Flow Balance Sheet, phased by month.

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Business RecoveryThe processBreakeven
Calculation Price
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Business RecoveryThe processBreakeven
Calculation Price
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Business RecoveryThe processBreakeven
Calculation Price
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Business RecoveryManaging Cash Flow

• Collect outstanding customer debts

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Business RecoveryManaging Cash Flow

• Collect outstanding customer debts.
• Invoice on the same day as delivery.

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Business RecoveryManaging Cash Flow

• Collect outstanding customer debts.
• Invoice on the same day as delivery.
• Reduce or eliminate credit given to customers.

17
Business RecoveryManaging Cash Flow

• Collect outstanding customer debts.
• Invoice on the same day as delivery.
• Reduce or eliminate credit given to customers.
• Liquidate surplus stock and other assets.

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Business RecoveryManaging Cash Flow

• Collect outstanding customer debts.
• Invoice on the same day as delivery.
• Reduce or eliminate credit given to customers.
• Liquidate surplus stock and other assets.
• Extend credit taken from suppliers. Renegotiate
  terms where possible extend credit limits.

19
Business RecoveryManaging Cash Flow

• Collect outstanding customer debts.
• Invoice on the same day as delivery.
• Reduce or eliminate credit given to customers.
• Liquidate surplus stock and other assets.
• Extend credit taken from suppliers.
• Defer HM Revenue Customs payments by agreement.

20
Business RecoveryManaging Cash Flow

• Collect outstanding customer debts.
• Invoice on the same day as delivery.
• Reduce or eliminate credit given to customers.
• Liquidate surplus stock and other assets.
• Extend credit taken from suppliers.
• Defer HM Revenue Customs payments by agreement.
• Consider Factoring or invoice discounting.

21
Business RecoveryManaging Cash Flow

• Collect outstanding customer debts.
• Invoice on the same day as delivery.
• Reduce or eliminate credit given to customers.
• Liquidate surplus stock and other assets.
• Extend credit taken from suppliers.
• Defer HM Revenue Customs payments by agreement.
• Consider Factoring or invoice discounting.
• Sell and lease back essential assets.

22
Business RecoveryManaging Cash Flow

• Collect outstanding customer debts.
• Invoice on the same day as delivery.
• Reduce or eliminate credit given to customers.
• Liquidate surplus stock and other assets.
• Extend credit taken from suppliers.
• Defer HM Revenue Customs payments by agreement.
• Consider Factoring or invoice discounting.
• Sell and lease back essential assets.
• Reduce overheads and direct costs wherever
  possible.

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Business RecoveryManaging Cash Flow
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Business RecoveryPrevent a Problem Turning into
a Crisis

• Have a business improvement action plan in place
  and act upon it

25
Business RecoveryPrevent a Problem Turning into
a Crisis

• Have a business improvement action plan in place
  and act upon it
• Prepare a financial forecast / budget

26
Business RecoveryPrevent a Problem Turning into
a Crisis

• Have a business improvement action plan in place
  and act upon it
• Prepare a financial forecast / budget
• Keep management accounts up to date on Sage /
  Quick Books etc

27
Business RecoveryPrevent a Problem Turning into
a Crisis

• Have a business improvement action plan in place
  and act upon it
• Prepare a financial forecast / budget
• Keep management accounts up to date on Sage /
  Quick Books etc
• Compare actual performance with budget

28
Business RecoveryPrevent a Problem Turning into
a Crisis

• Have a business improvement action plan in place
  and act upon it
• Prepare a financial forecast / budget
• Keep management accounts up to date on Sage /
  Quick Books etc
• Compare actual performance with budget
• Spend time monthly analysing your management
  accounts

29
Business RecoveryPrevent a Problem Turning into
a Crisis

• Have a business improvement action plan in place
  and act upon it
• Prepare a financial forecast / budget
• Keep management accounts up to date on Sage /
  Quick Books etc
• Compare actual performance with budget
• Spend time monthly analysing your management
  accounts
• Address areas of under performance

30
Business RecoveryPrevent a Problem Turning into
a Crisis

• Have a business improvement action plan in place
  and act upon it
• Prepare a financial forecast / budget
• Keep management accounts up to date on Sage /
  Quick Books etc
• Compare actual performance with budget
• Spend time monthly analysing your management
  accounts
• Address areas of under performance
• Dont ignore problems, they are not likely to go
  away

31
Business RecoveryPrevent a Problem Turning into
a Crisis

• Have a business improvement action plan in place
  and act upon it
• Prepare a financial forecast / budget
• Keep management accounts up to date on Sage /
  Quick Books etc
• Compare actual performance with budget
• Spend time monthly analysing your management
  accounts
• Address areas of under performance
• Dont ignore problems, they are not likely to go
  away
• If in doubt, seek external advice from your bank
  / accountant / Business Link