Member Article

Jobs and cash flow on the line as small business face up to the credit crunch

The Federation of Private Business (FPB) is advising small businesses to protect themselves against the consequences of the credit crunch, which include an increase in job losses and delayed payments from bigger customers.

The latest business confidence survey carried out by financial specialist KPMG has found that the number of firms intending to reduce staff numbers has almost doubled since the start of the year. The number planning to cut jobs has gone up from 29%, in the first quarter of 2008, to 53%. In addition, 52% are planning to stop recruiting new staff in order to cut costs. The FPB has also experienced a marked increase in calls from members specifically related to redundancies.

KPMG Advisory Director, Andrew Ashby said: “Adopting the same old blinkered approach of squeezing your suppliers and delaying payments is a zero sum game where only a few winners will emerge.

“Companies need to be more focused on gaining improved visibility and control of cash, and to work smarter across the supply chain to create win-win opportunities that reduce the cash cycle for all participants.”

The Federation of Small Businesses (FSB) meanwhile has released a number of ‘top tips’ for companies looking to avoid falling victim to the credit crunch. They include increasing financial flexibility by dealing with more than one bank; planning ahead; managing costs; and being prepared to seek professional advice.

To review the FSB’s tips fully visit www.fsb.org.uk

This was posted in Bdaily's Members' News section by Ruth Mitchell .