Funding is out there

First, the bad news. In some ways this year could be more challenging than 2009. Why? Because throughout the downturn many retailers have cut costs, reduced capital expenditure and kept a tight control on their working capital.

Therefore, if the economy bucks all the economic forecasts and declines still further in 2010, those retailers will have very little room for manoeuvre to improve their cost base.

The good news is that 2010 will also be a year of opportunities for retailers, especially those with strong management teams who have put in place a clear strategy to differentiate themselves. Even in challenging times, it’s important to consider all business opportunities because they might never appear again on comparable terms.

Of course, taking advantage of opportunities often requires funding and, despite common perceptions this remains difficult to secure, in 2009 Lloyds TSB conducted more deals in the retail sector than ever, providing advice and funding to existing and prospective customers.

Wherever we can, we try to underpin retailers across the country by providing the support and funding they need to succeed.

However, there are a number of factors retailers should consider when they are looking for funding. Here are some brief tips towards successful financing applications. First, let’s look inside the business:

Maintain a good balance sheet Listen closely to what customers tell you, adjust your forecasts accordingly and hold costs back in line with anticipated revenues. Being anything less than honest with yourself is counter-productive and allowing yourself to run into low margins - or no margins - means you won’t be well placed to take advantage of opportunities.

Preserve cash Profits are of no use if you are not preserving and collecting cash. Invest only in areas that are required by your short-term business needs and save the rest.

Keep your best staff and keep an eye out for new talent These are the people from whom growth will come. You may need to consider introducing incentives to attract or keep them. These needn’t be pay rises - some salary sacrifice schemes have proved popular and you might introduce a performance-related bonus scheme.

And here are some tips on looking outwards:

Maintain a good relationship with your bank Bankers are able to give you an independent view of your business. What’s more, they will be able to add extra benefit or value to your analysis as they use their experience and expertise of supporting scores of businesses in this sector. Good ones act as trusted advisers and pride themselves on the relationships they build.

Don’t focus entirely inwards Keep watching the business environment around you. If your head’s in the sand, you’ll never see when those once-in-a-lifetime opportunities arise.

As ever, the year ahead will continue to present challenges for retailers but with a combination of good sense, judgement, timing and product proposition they will not only weather the storm but emerge from it stronger.

Being prepared, that’s the thing - that, and finding people who can give you the support you need when an opportunity presents itself.