Changing Direction on a Down Economy: A Business Checklist

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Times are tough for just about everyone. Not all businesses can survive a long, drawn out recession. But you may be able to weather the current economic storm by following some of these common-sense strategies.

General Management Strategies

  • Address personal and personnel issues; decide on behavior that is essential for business success.
  • Set policies for customers and suppliers that will work for you in these tough times.
  • Work with your employees so that they contribute to the business’ success.
  • Invest time in solving problems (you and your team).

Be proactive in addressing all these vital issues:

  • Cash flow
  • Staffing
  • Costs
  • Marketing
  • Communication with customers, employees, and suppliers

Marketing Strategies

In a down economy it is even more crucial to have an effective marketing strategy:

  • Refine your core target market and think about a “niche focus.”
  • Reassess your current marketing strategy.
    • Keep in touch with current and past customers to thank them for their business and remind them of your services and products.
    • Re-examine your unique selling proposition to customers.
    • Ask for referrals.
    • Repackage services to accommodate smaller clients and reduced budgets.
    • Think about your pricing strategy.
    • Look for inexpensive ways to reach customers.
    • Watch for trends; identify ways to solve problems for your customers.
  • Make it easier for customers to want to do business with you.
  • Know what is most important for customers to know about you.
  • Make sure that your image/message is clear and consistent across the following areas:
    • Physical appearance of your facility/plant/office/store/website.
    • Prices.
    • Products.
    • Promotions and advertising.
    • Customer service.

General Financial Management Strategies

  • Focus your attention on the company’s financial state.
  • Regularly review financial statements. This will help you anticipate future challenges.
  • Make sure payroll is done accurately.
  • Institute financial controls—money could be trickling out that you aren’t aware of.

Improve your Cash Flow

  • Accounts Receivable Strategies

    • Bill customers as soon as possible.
    • Stay in contact with account holders.
    • Set firm credit policies and follow through.
    • Monitor accounts aging reports.
    • Keep current on collections.
    • Place overdue accounts on COD.
    • Manage and project cash flow.
    • Pick up large checks in person, if necessary.
  • Accounts Payable Strategies

    • Complete a cash flow forecast before setting a payment plan.
    • Prioritize whom to pay first.
    • Offer partial payments, if possible.
    • Keep your payment promises.
    • Renegotiate existing loan terms.
    • Consolidate your debt.
    • Offer to pay interest only.
    • If you owe taxes:
      • Contact all agencies immediately.
      • Respond to tax collection letters promptly
  • Cost Cutting Strategies

    • Review all costs for potential reductions from office supplies to freight.
    • Negotiate a rent reduction.
    • Sublet unused space.
    • Ask vendors for trade discounts, better payment terms.
    • Reduce personnel expenses, where possible.