How Your SME Can Survive Tough Times

Tough times don’t last but tough businesses do. Here’s how to weather a rough business season.

1. Improve your cash flow

During an economic downturn, it’s essential to ensure you have enough cash on hand for your day-to-day operating expenses. Aside from conserving cash, it’s important to maintain a healthy cash flow: this means getting your customers to pay you on time, and managing your own payments to vendors. If you are in dire need of extra cash to tide you over, consider taking on a DBS working capital loan to keep things moving.

2. Get your accounts in order

You should always keep your accounts in good order – especially when times are tough. You’ll probably need to keep a more watchful eye than usual on your finances, and this means timely updates to your accounts are absolutely necessary. Consider automating your accounting processes for greater ease – you can do this easily by opening a DBS Digital Business account or Multi-Currency account, and linking it to an accounting solution such as Xero or Financio. This will give you access to real-time account updates which will go a long way in keeping things organised.

3. Get a line of credit

A line of credit – also known as an overdraft facility – can be useful for SMEs looking to tide over a short-term shortfall in cash. Whether to help you with inventory costs, vendor payments or even just to make payroll, a line of credit can give you almost-immediate access to the funds you need. It is generally considered a low-cost financing option as well, as interest is only charged on the exact amount of funds used. If cash is tight, consider applying for a DBS overdraft facility.

4. Don’t hold on to more inventory than you need to

Holding on to extra inventory means tying up more working capital than you need to. Particularly during tough times, you’ll need to ensure your inventory keeps moving – don’t bring in more stock than you need, and run promotions as necessary to free up much-needed cash that can be used in other areas. Be sure to conduct regular reviews of your business’ inventory so you have a good idea of how much stock you actually need at a given point in time.

5. Refinance existing debt

Tough times are a good time to review your business operations – particularly in the area of cost savings. This means taking a closer look at your existing loans, and considering how you might lower the cost of your debt. If you have an existing commercial property loan, for example, now might be a good time to refinance – DBS commercial property loans offer competitive rates and could help you save some money in the longer term.


Click here for more information on other DBS SME banking products that you can take advantage of to weatherproof your small business.

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