SMALL firms in Kirklees have been urged to adopt their own austerity measures to help them survive the double-dip recession.
Holmfirth-based V&A Bell Brown, which has client accounts across the UK, said the age-old saying “watch the pennies and the pounds will look after themselves” has never been more true.
The advice comes as cash-strapped businesses in Yorkshire feel the pinch from the recession, the impact of inflation, the fallout from the bank crisis and a lack of access to funding.
The Federation of Small Businesses has cited the state of the economy, uncertainty over contracts, cash flow and access to finance as major barriers for small and medium-sized firms in the recession.
With almost 300,000 firms in crucial “time to pay” tax arrangements with HM Revenue & Customs and banks getting more stringent on lending criteria, the accountancy firm said a large number of businesses were in need of a financial health check.
Amanda Vigar, managing partner at V&A Bell Brown, said: “Data has shown that, historically, the highest number of insolvencies have consistently been experienced by firms that have between 10 and 100 employees. Also, it is a well-known fact that one in three businesses fail within the first three years of trading.
“If a good credit management process is not implemented before reaching this size, then a firm may find it significantly harder to keep its head above water as it goes for expansion.
“It’s more vital than ever that small business owners take a sharp and focused look at their business finances if they are to succeed in these tough economic times.”
The firm urged SMEs to focus on the basics – controlling cash flow, keeping books up to date and in order, increasing sales effort, distinguishing their business from their rivals, considering and costing out strategic options and keep employees informed about company developments.