Many successful entrepreneurs will tell you that when the economy falters, it’s time to get back to basics. Taking a fresh look at your cash flow, supply chain, products, services and operations could uncover some serious cost savings, or better yet some opportunities to win more sales. We spoke to a range of business leaders who have adopted this approach and here’s what they said.
On Controlling Costs
Aamir Ahmad – Managing Director, Dwell Furniture
Businesses run out of cash either because they are losing money, so that is obviously something you need to fix straight away, if you’re losing money, you need to be cutting that straight down or, alternatively, because their cash is draining into something else. Either it’s draining into capex, into fixtures and fittings, or it’s draining into stock.
Barry Chevalier – Managing Director, Aspall Cyder
What we are doing is challenging all our costs, setting a standard, and whereas I think normally we would check them every year and form that as the basis of the budget, what we are doing now is on a more routine basis, checking those costs, what we have put in the budget is the standard against what the actual is and comparing the two.
Peter Risdale – Chairman Cardiff City Football Club
Not spending cash you haven’t got is something you have to be hard-nosed about in football in today’s world. The difficulty is when you become emotional which you do on a Saturday afternoon because Monday to Friday you have your business hat on and on a Saturday afternoon you get emotional about the players on the field and then you dream about if only we had one extra player, if only we went out and bought this player and that’s when the danger starts.
Jack Scott – Chairman Jascots Wine Merchants
What I am trying to do at the moment is press for better deals to come in from my suppliers if I pay them cash on delivery or cash upfront.
On Management Strategy
Barry Chevalier – Managing Director, Aspall Cyder
We have had a really deep inward look at how we run ourselves and we’ve had to make structural changes which we have done and we are continuously reviewing what we do.
Aamir Ahmad – Managing Director, Dwell Furniture
We have focused much more heavily on the operational side of the business. So the back-of-house stuff where we have been able to squeeze savings out we’ve gone for it. So we’ve gone right through the warehouse, right through the buying supply chain teams, the marketing teams and we have really been looking at making sure that people are focused on exactly what they need to be doing.
Peter Risdale – Chairman Cardiff City Football Club
I think the biggest risk we’ve got, as with all businesses, is whether or not the customers can afford to buy the product and obviously we are very aware of the price sensitivity of perhaps season tickets versus the supporter who just comes to the odd game. What we are trying to do is to make the season tickets more affordable so we lock the customers in for the whole season.
On Cash Flow
Peter Risdale – Chairman Cardiff City Football Club
The cash flow in football is no different to in any other business and in fact to some degree outside of the Premier League it is more predictable because you’re playing X number of games, you budget for a crowd level, which as long you do that on a sensible basis you know what income stream is going to come in from there, and the only really strategic variable at this level is buying and selling of players.
Aamir Ahmad – Managing Director, Dwell Furniture
I think that the main thing is to focus on what is generating cash and make sure that you’re turning the cash as fast as you can and also where you are using the cash, and so we are very keen on pushing cash back from working capital into stock, that drives our business forward. Many retailers I know have redundant warehouses full of old stock. They are terrified of marking it down because they are concerned about the profit impact, well actually that is stock is dead, you need to get rid of it and you need to take the profit hit and release the cash.
