Home (business) protection

10 key ideas to safeguard your home business in a downturn. JANE SHELTON

Jane Shelton

By Jane Shelton

While the big end of town are taking Lift Capital, Allco and Opes Prime to heart (and trying to move their money to safer harbours) what should those of us in the home based business sector be doing to safeguard our business opportunities?

With the banks squeezing lending to home businesses that have been battling to grow their markets, we need to take action to weather this year-long financial markets storm as competiton gets tougher.

In the US they’re starting to admit that they are already in a recession (albeit mild). The crises of ABC Learning and Centro Oroperties here and the GE downturn across all of its worldwide divisions is crashing business confidence. 

This can only mean a greater likelihood of further downsizing, from the major corporates and more people considering setting up shop from home to reduce costs and turn the family home into a business centre. It also means that there will be pressure to cut back and put pressure on small business suppliers, which must be resisted.

Here are 10 key ideas to safeguard your home business and yourself as the going gets harder for both you and your customers from this global financial reconstruction:

  1. Focus on growth for the business – find the markets that you can capture market share with first to market-mover advantage and carve out a viable niche based on superior customer service.
  2. Meet with your family and sales team to do a little contingency planning – a rigorous assessment of your business strengths and weaknesses ensures that you concentrate on managing threats and capturing opportunities.
  3. Build your customer relationships – focus on your end users and what they need and want from your product/service offers; move to better deliver value to them through building upon their hopes and exceeding expectations.
  4. Make sure your distribution stream is working to your advantage – if you have supplier relationships locked in and extend your delivery contracts with favourable terms for your business – lock down your costs to keep the inflation genie at bay.
  5. Develop a residual income stream by following up all of your previous business contacts – even a phone call to ask how things are going – to remind them that you are still around and there to help as new orders cost more.
  6. Get your invoices out for work that’s been completed and follow up the laggards who haven’t paid their bills – conversely, hold on to the dollars and cents for as long as possible using your creditors credit for a little bit extra time wherever it won’t damage your credit rating.
  7. If you can get extended terms of trade or lines of credit, consider locking into a fixed interest rate. More often than not, home business will have available family members to go guarantor for loans or lend to keep the business going through the tough period; but be wary of collatoral damage to family members paying huge credit card debts and bank loans if things go under.
  8. If you’re a victim of “financial wealth destruction and de-leveraging” – that is, you’ve lost money – keep this in perspective. Remember with a successful home business you can make it all again provided that you don’t let the liquidators near your personal and company assets.
  9. Reduce costs in the business and increase efficiencies. For example, as it gets colder in the southern climes of the country consider your energy bills and think about making your home office cosy and warm to reduce costs – consider insulation and turn down the thermostat a couple of notches – don’t heat the whole house if you’re in your home office for the afternoon.

Finally, most business analysts expect that it will take between six months to a year for the financial markets to recover provided that the bankers have sufficient liquidity to fund those who have opened up new export business and kept their existing customer base going through this credit crunch. So…

10. Keep your spirits up and work/life balance in perspective – maintain your fitness regime even if things seem to be going to the wall, eat healthily and keep talking to the other members of your household – they can offer support through the stressful times.


Dr Jane Shelton not only runs a business from home but is doing business research into people working from home. She is managing director of Marshall Place Associates, Melbourne’s independent think tank, and CEO (honourary) for ‘Life. Be in it.’ International. Shelton has a Doctorate in Business Administration at the Australian Graduate School of Entrepreneurship (AGSE) at Swinburne University of Technology after a Master of Arts in Public Policy at Melbourne University and a Bachelor of Business in banking and finance at Monash University. She is the author of the book “No Workplace Like Home”.

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