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How to Preserve Business Capital

Posted by Mark Bates
Nov 30, 2018

With Britain’s impending exit from the EU, the country is set to enter a period of prolonged economic turbulence. As a result, it’s imperative that businesses have a strategy to preserve business capital. When considering how to preserve capital, business owners have to be methodical and realistic. Capital preservation requires you to strip back your business to its necessities to ensure its future.

How To Preserve Business Capital

One of the best methods for preserving business capital is leasing equipment rather than buying expensive technology. This technique is best employed with equipment you will only use once, or otherwise utilise so sparingly that an overhead investment will dwarf leasing costs. Selling off a company’s most expensive pieces of unwanted tech can free up a float of cash for repeat leasings of a range of items from laptops to networking equipment.

It may seem to hark back to a pre-monetary era. However, engaging in barter trade is an intelligent technique for preserving business capital. Rather than purchasing products for your business, you may be able to trade your own products/services to suppliers in return for those you require. This way, you can conserve cash and maintain the flow of products and services needed for your business to function.

Cutting down on staff

When asked how to preserve capital, business owners often correctly assume cutting down on staff is the most effective answer. Ask them what method of preserving capital they least want to do and you will likely get the same response. Nevertheless, as companies rapidly grow they overestimate the number of staff they need. Often, to cope with the rise in demand, they over-hire in a number of areas.

To preserve capital, you should scrutinise the size of your workforce and be willing to reduce it if necessary. This attitude should continue with future expansions. Indeed, you must always ask yourself if staff are maximising their potential productivity.

Adaptability is important

Preserving business capital is a continuous process. It should not be considered a quick fix for companies in a difficult position. The only way to ensure an effective capital preservation plan that will safeguard your business for the future is to constantly ensure you are reviewing your position. If you do not pay attention to the changes you make, the impact that these changes have and the fluctuations of the market you operate in, you are potentially endangering your business. What may have worked right now isn’t guaranteed to be effective in 12 months’ time.

Ultimately, you can preserve business capital in a variety of ways. Only those who run the business know what is most effective for their company. In times of crisis, employees will often ask their managers how they plan to preserve capital and whether their jobs are secure. It’s important to research your options so you can give them an honest breakdown of the company’s present condition and the steps you can take to protect its future.

Photo by HEADWAY

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