Softening the Crunch

1
Softening the Crunch

• Edward Pacey FICM FACP
• Director Credit Services
• Bell Microproducts

2
Softening the Crunch
3
Direct Costs

• Defer fixed asset expense unless delivery is
  immediate
• Cut back non-essential cost and improve
  productivity
• Reduce excess head count and cut back on overtime
• Get more out of what you have
• Shave or cut back non-essential marketing
• Suspend or cut functions
• Sell spare capacity
• Outsource routines if doing so can save money
• Reduce Directors salaries!!! (temporarily
  maybe)

4
Supply chain

• Negotiate on deals nothing should be deemed
  fixed
• Seek temporary extended payment term support if
  its sound and makes sense, response may be
  positive
• Seek discount for early settlement
• Consider order sizes and frequency to reduce
  delivery/freight/insurance cost
• Work with us to give you support, flex and real
  value-add. Bell Micro has an excellent pedigree
  and proven track record in all these areas
• Maximise marketing and Co-op support
• Use our outsourced partner services and
  specialist knowledge and offerings
• Consider payment by direct debit in exchange for
  extended terms this is available to SMBs
  currently on standard thirty day terms
• Make full use of our Credit Financial service
  offerings

5
Customers

• Check your customers credit standing and ability
  to pay prior to trade and frequently thereafter
• Agree terms and conditions at the onset of
  business trade
• Keep tabs on payment and watch for new or fresh
  delinquency, dont over-react however
• Do not accept late payment but be willing to
  accommodate and adjust principles and offer
  flexibility where required or merited but not at
  your cost
• A debt paid late is better than no payment at all
• Adjust your model and trade with customers to
  encourage prompt payment habit
• Counter fraud activity and employ process checks

6
Business opportunity

• Work and improve on your quality standards do
  not compromise them
• Work your database to the full to increase
  customer breadth reduce dependency on too few
  clients
• Review and discontinue less profitable lines or
  business activity
• Continually refresh and increase your client
  database do not let it stagnate
• Target and reward Sales in maximising the
  opportunity you create and develop and enshrine
  the ethic of profit and return
• Actively market the value-add you offer and
  encourage employee input in new ideas and
  direction
• Consider how you can capitalise on new and
  emerging opportunity
• Work on money saving options such as bulk buying
  discounts and dont be afraid to sell less costly
  alternatives
• Do not dismiss third party interest or MA
  consideration

7
Financial

• Do not be afraid to ask for additional funding
  from banks and stakeholders
• Review banking and funding arrangements if you
  feel providers attitude and support is
  restrictive or inflexible
• Focus on return on working capital and cash
  conversion cycles
• Involve funders and key suppliers in your
  planning and forecast process to instil in them
  the required confidence in your business.
• Negotiate HMRC and other Tax payments
• Managing cash has never been more important or
  critical -its your business blood supply
• Ensure proper internal financial controls and
  their integrity
• Budget and forecast sensibly with feet firmly on
  the ground
• Re-invest profit, dividends can follow later
• Consider third party independent advice
• If you hit a problem, talk to your principal
  suppliers