Recession Proof Your Business
Many businesses and
their employees are facing challenging economic times. Credit
restrictions, job losses, sales cutbacks, soaring energy prices,
mortgage foreclosures and a downward economy makes it hard to
successfully run a business. Here are some of the basic ideas to keep
your business profitable in tough times:
A recession may be the opportunity for your business to grow market
share, cut expenses and increase efficiency. Be prepared.
stop marketing. It is tempting to cut marketing as sales
decline. In the short run that false economy may increase profits. In
the long term you may lose customers and sales and ultimately decimate
your business. Instead, try to cut back on lower return advertising and
emphasize the more efficient methods of promoting your business. Focus
marketing on those customers that are most profitable to your business,
Financial Analysis. This is the time to check the numbers,
consult with you tax attorney and account, and determine how to
increase profits and lower taxes. Make the changes to increase the
efficiency of your business.
a Plan for Efficiency. Revise your business plan
and budgeting process to squeeze out the efficiencies in your business.
Look at the long term. If you cut-off a customer's credit, will you
lose the customer in the long run? If you play money games with
suppliers now when you are needed what about when demand from other
Cash Flow and Capital. In a turbulent economy, your
business needs cash to pay
its bills. Cash is needed to implement growth plans and take
advantage of business opportunities.Cash
for Buying Opportunities. Some of your competitors may
need to scale back or sell outright. Look for good deals that can
position your business to take advantage of economic growth.
fair to Employees. If you have rounds of across the board
firings, your employees become scared and good employees will look to
your competitors for job opportunities. Employees work for your
business because the seek the security of a continual paycheck.