How to survive an economic downturn

19. Watch your competitors?

Andrew Pattenore, founder of estate agents Parsons, advises keeping an eye on competitors to see how they?re responding to the slowdown. You might have to do the same or face losing your customers. Pattenore says: ?Even in the London property market, estate agents are reducing their fees to attract custom. In order to survive the current conditions, we?ve had to do the same.?

20. Go to staff for advice?

Your staff can be a good source of ideas to help improve the business. ?It?s important that staff are made aware of the company?s future plans ? they may have useful ideas to help generate business,? says Chivers. But it?s important you don?t cause your people undue worry, she warns.

21. Don?t stop innovating?

Paul Samrah, a partner at accounting firm Kingston Smith, says innovation is still important, despite cutbacks you may have to make. ?For SMEs to compete against the larger, more established enterprises, they still need to invest in innovation?, he says. ?However, in order to maximise returns on investment, businesses need to understand which areas of innovation are most effective for them. SMEs need to align their innovation efforts with their overall business strategy.?

22. Make everyone a salesman?

Simpson says Limelight is encouraging clients to ensure their employees are all ?brilliant ambassadors for their business? to help drum up sales. ?Every employee can have an influence on an existing or potential client. They?re all sales people, really.?

23. Look at staffing?

Raynor recommends checking the terms of employment of all your staff and recognising who your ?stars? are before you consider laying any of them off. When it comes to recruiting new people, Head Resourcing?s Paul Atkinson says: ?We?re being slightly more cautious this year. In 2007, we had a 45 per cent head count increase, but this year that figure is set to flatline.?

24. Be flexible?

Many SMEs have the advantage over their larger rivals because they?re better able to react quickly to changes in the market or the demands of a customer. Simpson says: ?I set my business up in 2002 towards the end of the downturn that followed 9/11. I was able to win business because I could offer more personal service to my clients. Also, if you?re adaptable, you?re not bound by a set of numbers you?ve got to hit.?

25. Start a new company…?

But only if you know what you?re doing, advises Atkinson. He started his recruitment firm, Head Resourcing, in the dotcom crash of 2001. ?A downturn can be a good time to start a business if you?re in an industry sector you?re familiar with. Business is cyclical ? there are always booms and busts.?

26. Plan for the worst?

It may seem pessimistic, but Holmes says companies must consider the worst-case scenario. ?Approach your problems rationally and have back-up plans in place?, he says.

27. Don?t panic!?

Economic slowdown doesn?t mean recession. The textbook definition of recession is two consecutive quarters of negative growth and we haven?t hit that yet. Ashton notes: ?Slowdown does not mean stop. Providing you can weather a storm, you?ll be fine. Don?t talk recession up; it might never happen.?

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