Businesses 'face challenges in year ahead'

Despite the difficulties ahead of them, there are a number of steps that small businesses can take in order to cope through the downturn.

Such is the assertion of SCORE which claims that owners of such firms "face challenges on many fronts during the next 12 months." Among the problems organizations are likely to have to contend with are tightening access to lines of credit, lower consumer spending and increasing unemployment rates.

Ken Yancey, chief executive of SCORE, said, "Small business owners are smart, resilient and optimistic. However, conditions have become difficult."

In order to manage through the financial doom and gloom, the organization advised that small businesses avoid panicking and make sure that they keep a firm focus on the fundamentals.

SCORE reported that those managers which are looking to improve their efficiency and resourcefulness should plan their capital expenditure carefully and investigate new ways of doing business.

It was also stated that firms should look into ways in which they can reduce their costs and keep a regular eye on their cash flow, while making sure money is collected from vendors.

Last month, Sean P. Melvin, associate professor of business law at Elizabethtown College, Pennsylvania, claimed the financial downturn could see businesses fail to receive payments from customers and clients. As such, he advised firms to get to grip with their accounts receivable in order to avoid a "cash flow crunch."