Know your customer

Focus on retaining customers: When finances are uncertain, consumers cut their discretionary spending, so do all you can to keep your customers coming through your doors. Loyalty schemes, small discounts and regular communications are just three ways of letting your customers know you value them.

Provide outstanding customer service: Consumers appreciate businesses that give them more value for their money, especially when times are tough. Efficient service, fast delivery, flexible payment terms and so on, can persuade people to spend with you rather than a competitor.

Increase your marketing: When competing for a smaller pot of money, it becomes more important than ever to tell people why they should come to you. You don't have to break the bank, but be sure to shout about your business.

Concentrate on products and services that sell: Don't put your efforts into trying to sell things that are untried or that few people will buy; stick to profitable favourites. Don't always be tempted to slash prices either - if demand for your offer is not price sensitive, you will be giving your profits away.

Credit check new customers: It may only take one major customer to go bust to jeopardise your business. Protect yourself by conducting rigorous credit checks on new customers and agreeing clear terms up front.  A simple check with Companies House can confirm they are who they say they are and enable you to check their accounts. Check they are a good risk – by checking with a credit reference agency, by asking for bank and tradereferences and by searching the Registry of County Court Judgments to reveal if those running the business are in financial difficulties.

If the worst happens: talk to your bank if you need additional funding and tell HMRC –you may be able to reclaim the VAT on bad debts. For further advice, visit Business Link's guide to debt recovery

For steps to take if you are owed money by an insolvent company, visit the Insolvency Service.

Next: Operations