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
- Communication with customers, employees, and suppliers
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.
- 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.