100% Owner and Director of the company Duncan Bannatyne did not take dividends from the company, choosing to re-invest the money in order to weather this storm saying that "I just don't need the money". Lucky for some, eh!
Bannatyne chose to reinvest the money in improving customer service and maximising profits, as opposed to expanding and over-stretching themselves. Bannatyne said, "in 2008 what we decided to do because of the banking crisis we decided to stop expanding and focus the group on maximising profits. Our turnover is up 2pc on 2008, so we are trading well."
Furthermore, Bannatyne Fitness's highest paid director received a £30,000 pay increase in 2008 despite economic conditions. Considering the success the business has had in the same period it would seem that investing in valued staff is well worth it.
So how can we follow Bannatyne's example?
- Try not to over-stretch your business. If you do not have the means to support a sudden influx of customers then they will not last long. Instead try to maintain existing customer relationships and expand carefully, ensuring that new customers will value your business and maintain loyalty.
- Don't take more than is necessary. Consider taking a salary cut in order to keep as much in the business as possible for long term development and profits.
- Value your staff. You may not be able to give them a pay rise, but be open with them. Tell them you are taking a pay cut (if you are!). Maybe suggest they work from home every now and then, so they can have a lie in. Happy employees are far more productive.