The wave like impact of the credit crunch is hitting small- and medium-sized companies. Banks have restrictions on lending and the property market is in sharp decline. All sectors will be hit, with property, restaurants and retail being the earliest to see problems.

The priority in a recession according to John Whiteman, one of the UK’s top troubleshooters, is to stay in the game.

Whiteman says that many companies will not survive this crisis over the next two years but those that act decisively and early will be more likely to survive. For the fortunate there will be the opportunity for expansion when the economy changes if planning and trading are good from the outset.

Whiteman is currently working with clients to set them up to take advantage of the opportunities that occur when there is a decline in the economy. He typically implements certain measures in his clients’ companies to track and monitor performance. “With awareness of where you are it becomes easier to see where you are going. It does not matter what the sector is, when there is a correction in the market there are certain things that can be done to maximise opportunity,” he said.

Whiteman looks for clients to remain entrepreneurial but operate a strict financial accountability. With gut- feel and statistical analysis most companies will be able to take advantage of this decline.

He pinpoints five financial protection areas for small- and medium-sized businesses:

1. Have your personal and business account with separate banks.

2. Resist giving a personal guarantee to a bank. If insisted upon then make sure it is capped at a level of risk associated with what you are prepared to lose.

3. Always run a cashflow so you can see where you are and a little way ahead. If your best skills in business are not financial - delegate to someone who specialises in this area.

4. Look to establish two months cash at bank to cover overheads. If this is not in place make changes actively.

5. The most important thing is to have fun. If you don't have fun, do something else.

“It is never too late,” said Whiteman, who can be contacted through www.rivermanagement.co.uk

Topics