Small and medium sized enterprises can survive 2010’s tough business environment and thrive by following some key principles, according to a senior banker.

Stephen McDonald , regional director for Bank of Scotland (Ireland) in Belfast said that while the pressure on SMEs has increased in the downturn, they can still take measures to safeguard their business and plan for its future.

“The downturn in the economy has meant that many SMEs are choosing to concentrate on what they do best. Sticking to your core strengths is a good business strategy in the current climate,” said Mr McDonald.

He also advises that companies stick with their customers through the difficult parts of the business cycle.

“Take note of the customers that stayed with you through the tough times because the chances are they will be your best customers in good times too,” he said.

“Look after them and they will look after you.”

Among Mr McDonald’s other top tips are looking for new ways to maximise cashflow and access to it, because a strong cash flow system is the backbone of a successful business.

He also recommends that firms stay in close contact with their bank.

“Interaction with any bank needs to be open, honest and in the current climate, as regular as is appropriate. This builds trust and strengthens the relationship, even in a down cycle.

“The catalyst for making this type of relationship work is open and honest communication and no surprises. It is in no one’s interest to have issues pop up out of nowhere, if they could have been identified and worked through at an earlier stage,” Mr McDonald said.