Practical steps to beat the credit crunch

These are difficult times for all businesses but for the legal sector in particular it comes on the back of a challenging few years where the infrastructure of the whole sector is under threat.

But away from these additional “challenges” you, like all business people, need to ensure that your company does all it can to survive the downturn and here are a few tips on how you can do this starting today.

• Promote a profit culture – how many of your staff don’t treat your firms money as they do their own? Do you tell them what you are trying to achieve in terms of income and profit? Do you reward them if profit levels are exceeded? A profit culture in a business starts at the top!                                                  
• Challenge your suppliers – are your suppliers implementing regular price increases on your supplies? Do you ever refuse to accept and increase? Do you think a supplier will stop supplying you if you refused a 5% increase?              
• Keep your fees in line – are you aware how the overall price increases in the economy are affecting your profit levels? Have you increased your fee structure to compensate? If you do let’s hope they have not read the previous point!                  
• Don't take the bait – if you are offered a deal by a supplier to save you vast amounts of money that seems too good to be true that is most probably the case. Don’t forget there is a cost for everything and an offer of something “free” will be funded by you elsewhere.                                                                           
• Don’t ignore your indirect costs – good cost management is not just about beating up suppliers it is also about your administrative processes too. If you have a supplier who invoices you for every order, ask them if they can give you a consolidated monthly invoice instead. This way you know the maximum number of invoices you will process for that supplier will be 12 a year. On average an invoice costs your business £42 to process.                                    

Some of these ideas will take time to implement particularly if you are trying to change peoples’ attitudes but it is worth persevering for your long term survival. Maybe the start point is to challenge your own views on how you work and run your own department or business?