With the UK economy and housing market teetering and consumer confidence plunging, many UK businesses are facing tough times ahead. Business owners will have to ride out the coming storm, and ensuring that their companies have no legal or operational vulnerabilities will be a crucial part of this. Streamlining your business, cutting down unnecessary costs, assembling vital legal documents, protecting your finances and refining your employee and business contracts are just some of the steps you should take to safeguard your company's future.

Review your business contracts and invoices

If a business that owes you money or that you have important dealings with fails, you could be left severely out of pocket. Now is the time to check the terms and conditions of your business contracts; it is worth contracting a lawyer or getting some good legal document templates to make sure your business contracts don't have any loopholes in them. A struggling business will find any excuse it can not to pay up, so don't give them an easy opportunity!

Chase up any outstanding invoices, and make sure that they are paid promptly from now on. By tightening up your business contracts and the way in which your company handles its invoices, you can secure a more regular cashflow and protect yourself against bad debts or problematic clients.

Review your staffing situation

Consider your staffing – you may need to concentrate on retaining your key members of staff and consider if there are any positions that are surplus to the requirements of the business. Check contracts for notice periods and any redundancy payments that employees are due, and figure out how much it will cost the business to let unnecessary members of staff go. It may turn out that it is more cost effective to keep even the weaker members of your staff employed, or it may be that you can substantially reduce your operating costs by getting rid of unproductive employees.

Check your business banking

With every week seeing another bank teeter and fall, it is vital that you make sure your business banking and savings accounts are well protected. If you have substantial business savings, it is worth spreading them between several different banks to minimise your chances of loss. Of course, this is also the time to make your money work for you as hard as it can, so shop around for the best deals (and best protection) for your business savings.

Check your debts

As the credit market tightens up, the cost of borrowing is likely to increase, which could spell trouble if you rely heavily on credit to maintain liquidity in your business. Look to see if you can find ways of reducing your reliance on credit, keep an eye on your existing sources of credit to make sure the cost of borrowing doesn't change, and make sure that you thoroughly research the terms and conditions of any new borrowing that you undertake.

The economic downturn doesn't have to spell disaster for your company – with watertight business contracts, efficient staffing, rigorous invoicing, and sensible use of savings and credit, you can give your business the best possible chance of success.