A business and financial advisory firm has prepared a 10-point guide to surviving the credit crunch.

The New Practical Guide to the Credit Crunch, by Leicester firm Grant Thornton, advises businesses to take quick and decisive action to help them survive these difficult times.
The 10 points include controlling and conserving cash flow and forging a closer relationship with the bank.

Managers are advised to be relentless on cost control and to revisit their strategy while trading in tough conditions.

Garry Meakin, office managing partner at Grant Thornton, said: "Tax, in its various forms, is usually one of the biggest overheads.

"With a view to controlling cash outflow, you can manage taxable profit so it is below £1.5 million.

"This can be managed in a number of ways, such as scheduling bonus payments for the directors or the timing of capital expenditure to benefit from capital allowances.

"Motivation can take a hammering when business is lean. Once you have defined your key objectives, you need to make sure staff understand and are rewarded for achieving these.

"If the cash simply isn't there to make bonus payments, you have to be completely transparent and communicate effectively the position. Consider alternatives, such as a deferred share arrangement, to encourage staff to stick with you through the downturn. Finally, protect your personal wealth. Try at all costs to avoid throwing good money after bad debt."

Source: Leicester Mercury

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