Top tips for Surviving a Recession.

Here are our top 10 tips for families surviving a recession;

1. Face your demons.  Don’t shove brown envelopes upopened in drawers, open, read, digest.  Pull them all together and look at them properly.  Sleepness nights and money worries frequently stem from panicing and worrying about the unknown.  So deal with facts, draw up a list, add them all up, look at the payment dates and the interest rates, and get a plan together on how to deal with them.
2. Make up a household budget, there are lots of sites that will help you here, particularly Money Saving Expert .  Go through all of the standing orders and direct debits and cancel any that you don’t think are really important right now.  Cancelling a few subscriptions etc could give you an extra £100 per month – that’s probably the equivalent value of the electricity bill.
3. Talk to an Independent financial advisor, particularly if your mortgage is reaching the end of a fixed or discounted period.  Talk to an independent financial advisor too if you are just worried.  Many people have endowments, and will be receiving scary letters telling them that the value of their endowment or pension has fallen, together with a valuation of what it’s worth if cashed in today.  The same thing applies here as with property, you don’t make any losses on shares until you cash them in.  If you’ve a pension, or a shares ISA with a lot of years left to run, then remember that you are currently a buyer.  And this is probably a very good period to be scooping up share units.  This month, your contribution will be buying 1/3 more units than it was last month.  If your pensions or endowment is due to mature within the next few months then talk to an Independent Financial advisor about your options.  There are lots of options and lots of financial products, so talk to someone with the right knowledge about them.  You should also talk to a financial advisor if you find that after you’ve drawn up your list of bills, and your budget you know that you’ve got a shortfall.  Don’t call some random number off the telly, talk to a proper financial independent advisor and they can pass you onto the right person to deal with your situation.
4. Don’t worry about your property’s value, as long as your mortgage payments are affordable, and you have no intentions of selling, declining property values have no real impact on you.  It’s scary to hear that property prices are falling by x%, but you don’t make a loss until you sell something, until then the valuation is just a theoretical number.  So don’t worry about it.
5. Be proactive.  Talk to your bank manager, or credit companies, electricity & gas companiesor anyone else that you have bills with that you think you can’t afford.  Talk to them before you can’t afford afford the payment, and this way you can avoid defaulting, which will help your credit rating going forward.
6. Be sensible.  Odd treats now and then are one of those things that we like to lift our souls.  But be sensible about the big expensive stuff.   Most people don’t really NEED a lot of the purchases that they make, but marketing, big companies, supermarkets etc lead us into thinking that we do.  Be aware of all those retail marketing tricks that are out there to seperate you from your money.  Our biggest recommendation is a simple one, don’t go shopping unless you need something.  Window shopping when you’re watching the pennies is not good for the spirit.
7. Don’t buy ahead for Christmas.  This applies to food, drink etc.   When you’re shopping at the supermarket don’t fall into their trap of buying things for Christmas early.  In lots of instances the sell by dates will have expired before the big day.  It leads people into over buying, it doesn’t seem much when you buy a few items each week for the next 9 weeks, but if you do that every week then you’ll end up with cupboard loads of food and drink that you’ll end up binging on, or throwing out after the festive period.  Instead, but the cash in a jam jar, or a seperate savings account, and the go out and buy what you need when you know exactly whose coming and where you’re going over the holidays.  It will also stop you eating it before Christmas, and then having to buy it all over again!
8. Do buy ahead for Christmas.  Buying a few Christmas presents every week can help spread the cost.  We recommend strongly though that you write a list of who you’ve got to buy for, and that you write next to it what you buy, and you keep this in your purse/wallet.  This way you know that you don’t end up buying twice for some people, and you avoid the “i’ll give this to someone, haven’t worked out who yet” situations.  Remember that everyone is facing the same pressures on their wallets and bank accounts, so probably friends and family would appreciate a sensible limit on christmas spending, you’ll not just be making it easier on yourself, but on them too.
9. Redundancy.  This is the big one that everyone fears, and it’s also the one that individuals have least control over.  If you have been working for your employer for more than 2 years then you should be entitled to a redundancy payment.  Redundancy deals can be negotiated, so don’t blindly accept the first offer.  Take advice from ACAS, its free, and it’s the most knowledgable source for employment advice.  Bear redundancy in mind if you are changing jobs, realise that as last in you are likely to be first out, and that you are likely to get no redundancy payment.  Read your contracts and find out what provisions etc are made.  Redundancy can have huge implications for your family, but face them with your eyes open.  If you have an income protection policy look it out and find out how long it is before you can receive any benefit, contact anyone that you have trouble paying and explain that in a few weeks time you will be better placed to pay the bills.   If you don’t have any such cover then your employer may provide support, particularly if the number of redundancies is large scale.  If your employer has no such support for you then contact your local benefits office who will show you the way through this.
10. The hardest – stay happy!  Recessions can be tough, and some families or businesses can find it much harder than others.  But if you’re getting through it then be proud of yourself, and your efforts.   When times are hard people tend to retreat inwards, and this can be bad in families, particularly if one partner has a habbit of carrying the financial responsibility alone.  Share the burden, share the treats.  Explain to the children that things are a bit tight at the moment and so you’re saving the pennies for Christmas or whatever.  Keep communicating, and make the most of the free things in life.

Petrol under £1 a litre

We finally see a supermarket war has broken out, and the result is lower petrol pump prices, finally back below that £1 a litre mark.

The thing is, the price of a barrel of oil has fallen form $150 to $80 but we’re still only slowly seeing 1p – 3p reductions working their way through to the pumps.  It’s also very interesting to note that it’s not the oil companies launching the price cuts, but instead the supermarkets, shaming the oil companies into following suit.

It has been said that it can take up to 6 weeks for a reduction in a barrel of crude to work it’s way through to the petrol pump price.  However, increases in the price of crude seem to have an immediate, sameday, increase in our fuel bills.

Do we have a case of the oil companies wanting to have it both ways?  Or is there any underlying commercial reason that the price cuts have been so slow to work their way through to the consumers.  Some my cite the financial crises, unstable markets, fuel companies being reluctant to pass on cuts incase the next week they need to increase the prices again, and all the bad PR that would bring with it.

Or is it simply the case that the fuel companies will charge what the markets will bear, and that during the last few weeks consumers, the media and everyone else has taken their eyes off the price of fuel, and have been watching the FTSE instead, and so the oil companies have simply sat quietly by and taken advantage of a couple of weeks of higher margins.

If this is the case, is it wrong?  Are we right to expect the oil companies to pass on the reduction in the price of crude, after all they are all commercial companies there to make a profit.  They know that there are lean times coming and that now is not a time for a low margin/loss making price war.  After all, many of the banks failed to pass on the government’s required 1/2 % interest rate cut onto new borrowers, choosing instead to keep it and use that to give themselves a bit of a cushion and to make a bit of a profit to cover those great big losses.

The price cut does however co-incide with the Prime Minsters’s call last week for the oil companies to cut the price of fuel.  It seems that someone is still keeping a close eye on them.

Top Five Strategies For Small Business In A Credit Crunch

In times like these, small business are under tremendous financial pressure. Finding Credit is a nightmare, large companies are taking longer to pay their bills and the cost of fuel is having a massive impact on the profits.

But small business owners will not go down without a fight, we have all had to work very hard to get to where we are now, and we won’t give up to the credit crunch without a fight.

The government has always encouraged us to grow our businesses as big and fast as we can, and obviously to do so we use money in the form of over drafts or loans from the banks. The bank mangers are now in a very tricky position, they still have achieve their monthly targets to achieve, but are thawrted by not being able to lend us the money we need.  All businesses, large and small are finding it hard to renew overdrafts, and this isn’t simply something that affects the traditional retail businesses usually hit during a recession, but also the business usually “untouched” by hard trading times such as accountants, solicitors and even GP Practices.

However, its not all gloomy news. According to the Federation of Small Businesses (FSB), entrepreneurs and small business owners are proving resilient in the face of tough economic conditions, are even finding new ways to turn a profit, despite a shrinking credit market.

If you haven’t already started thinking about how you will get though this credit crunch then its time you did, this isn’t a time to be burying your head in the sand. So here are five very helpful tips that may help you.

1. If not already, then join the Federation of Small Business (FSB), as a small business this is the organisation that speaks out for you, lobbying and publicising.  In times such as this, with the banks screaming for billions of pounds, small businesses need to stick together and shot together so that they have a voice that can be heard.   Additionally, member benefits such as protections from employment tribunals and legal advice regarding collection of money from customers can give you peace of mind against unexpected bills and stressful situations which in times such as this may hit your business harder than normal.  The cost of being a member starts at £100 a year, most of which many business can recouperate in the first year from saving on member discounts with credit card processing alone.
2. Keep a close eye on you cash flow, get your invoices out as soon as you can and if you are delivering goods direct to your customers offer a little extra discount for COD. The companies that take a long time to pay their bills can be a real pain, and chasing them for overdue money can be soul destroying.  Some of these companies may be large, high profile companies, but you have to ask yourself are they really worth the time and heartache, and more importantly is there a worthwhile profit at the end of it, after you have taken into account the cost of the sometimes 90days credit that have taken from you. Some times its better to let someone else have the grief. We also recommend that you always do a credit check on all new customers and agreeing clear credit terms up front, even perhaps taking a deposit, it could cost you a lot of money or your business if you don’t.
3. The costs of running a business today is very high, so you need to look at where you can make savings in every part of your business. But before you start sit down with the last years accounts, go though them work out what has become more expensive and how to reduce your overheads. Remember not to cut the quality of your product or service unless you are doing this as part of a change in strategy, and changing your marketing and pricing. You may consider moving to a smaller premises or subletting some of your existing space. If you are considering redundancies make sure that you do it the legal way, remember if your a member of the FSB they will help advice you.  Combine trips, meetings etc, make weekly chart for the office for all your deliveries etc, so that you and your staff make necessary journey only, its all about saving fuel and time.  And finally take a look at your fixed costs.   Many businesses don’t regulary review this because after all fixed is fixed.  However, in times like these it’s sometimes useful to go back to that blank piece and paper and work from nothing upwards.  What do you really need in order to carry out your business today?  Just because something has always been done in a particular manner it doesn’t mean that that you need to keep doing it that way.  Times such as these are good opportunities to look at your business from a different perspective.
4. Focus on keeping your customers. When Finances are uncertain, consumers cut unnecesserey spending. So do all you can to keep your customers coming through the door. Small discounts, loyalty schemes and regular communication are just three ways of letting your customers know you value them. Customer service is very important, they appreciate suppliers that give that extra service for their money, especially when times are hard. Good service, fast delivery and flexible payment terms can help persuade people to spend with you rather than a competitor. Just go that extra mile.
5. Marketing your business can be a real nightmare, there is the risk that your full page advert in the local paper just becomes lost in a paper full of other full page adverts all screaming out “special offer”.  It’s time to think about new and novel ways of advertising, and the best thing is that “novel” needn’t always be expensive.  For example In-game product placement is becoming a one of the fast growing forms of advertising, game players spend traditionally twice as long on the internet as any other user, and adverts get twice the average branding and exposure per advert.  Also gamers are a very chatty and connected group of people, and word of mouth and recommendations are always the best form of advertising.  After all, what could be better than using in-game product placement to advertise your business, pitching it in exactly the right context.  Because this is such a new and exciting form of marketing, rates can be cheap and deals can be found,

If anyone is interested in opportunities for their business in in-game marketing then contact us at Fantasy Couriers and we can discuss how we can put together the best possible package for your business.