Resist Recession Tips
| Category: Top 10 Tips | Date: 2002-05-30 |
Top Ten Tips for a Recession Resistant Business
The media pundits relentlessly talk of recession. Refuse to let your business be part of this negativity. Recession-proofing your business means developing dynamic plans for cash, sales, expenses, employees, and equipment - call these plans "budgets". Budgets work for those who can live with a plan and understand that extemporaneous actions feed unpredictability. Planning now may ease your path through s-l-o-w times. Here are the ten areas you need to look at in your business to become Recession Resistant.
1. Ca$h must be Projected and Budgeted. Cash can be increased by instituting cost reductions, increasing sales, and selling assets. Key to this success is building a Cash Flow Plan.
2. Set controls to manage cash. Bring the entire company into play. Choose who will be the "Cost Control Monitor". In small companies, this is usually the owner in larger companies, the bookkeeper/accountant. Be warned, if the owner has not bought in to the plan, it will fail.
3. Look at your staff. Michael Gerber in the E-myth Revisited reminds us that you should only hire the person with the minimum requirements for a job. Look at your staff, are they right, are some ready to retire? Can some jobs be eliminated? We all hate to cut employees, but sometimes there is no choice. Success Tip: Enlist your employees now in making your company efficient - often they have great ideas and will come up with plans that save jobs and create cash!
4. Review Fixed Costs. When was the last time you really reviewed your electric bill, phone bill, cell phone bill, water bill, insurance, rent, bank fees, taxes. It may be surprising but mistakes are made - too frequently.
5. Have a Marketing Plan. Call it a protective marketing plan so you will be preserving your customer base. Often improving your customer service can lead to repeat sales. Check your product/service mix and make sure you getting the most bang for your buck. Stay in front of the customers - if your competition quits advertising, you will be the name remembered.
6. Do the Marketing Plan. Work your marketing plan and track the results. If you do not know how new customers find you, you are wasting your advertising dollars. Take advantage of all free and low cost programs. These include coop advertising, press releases and going to the "free and low cost" meetings for organizations you belong to already. Ask to be a guest at organizations you dont belong to. Success Tip: Check out Business After Hours programs that are available in your area through the Chamber of Commerce.
7. Have a Sales Plan that is designed to increase sales volume. Review sales expenses and look into establishing sales incentives for sales people that exceed their goals. Success Tip: Remember that sales incentives need to be for new or increased sales. Selling deeper to an existing customer is just as important (and often easier) than developing new customers.
8. Sell Assets. I know, you need every ______________ (fill in the blank - ie. computer, truck, desk) because you might have a real growth spurt. Well, you can always buy used stuff at someone elses "going-out-of-business" sale. Leasing equipment or outsourcing production if possible can help with surpluses in the future.
9. Review your Debt. Look at your total debt picture. Often debt can be restructured to get a lower overall interest rate. $40,000 at 11% interest per year will have an interest payment of $367 per month. The same amount at 18% will be $600 per month. If you have loans, accounts payable, lines of credit, they may all be at different rates, get out your calculator, develop a plan and go off to see your banker. Not happy with the answer, try another banker.
10. Develop a Vision. This is usually the first thing to do on a business plan. If you are still committed to your business after doing 1-9, then make a business vision that looks beyond the problem. The Pike Place Fish Market in Seattle was drowning in red ink when owner John Yokoyama in the early 80s decided something had to change. He enlisted his employees and they developed the vision to be World Famous. It is an amazing story. Check it out at: Fish Philosophy (www.fishphilosophy.com) or Pike Place Fish (www. pikeplacefish.com). Purchase the book: Fish! A Remarkable Way to Boost Morale.
Copyright 2001 Linda Lucas Fayerweather
About the Author
This content may be copied in full, with copyright information intact, without specific permission, when used in a not-for-profit format. If other use is desired, permission in writing from Coach Fayerweather is required.
Fayerweather Coaching
lindafay@lindafay.com
http://www.lindafay.com
The media pundits relentlessly talk of recession. Refuse to let your business be part of this negativity. Recession-proofing your business means developing dynamic plans for cash, sales, expenses, employees, and equipment - call these plans "budgets". Budgets work for those who can live with a plan and understand that extemporaneous actions feed unpredictability. Planning now may ease your path through s-l-o-w times. Here are the ten areas you need to look at in your business to become Recession Resistant.
1. Ca$h must be Projected and Budgeted. Cash can be increased by instituting cost reductions, increasing sales, and selling assets. Key to this success is building a Cash Flow Plan.
2. Set controls to manage cash. Bring the entire company into play. Choose who will be the "Cost Control Monitor". In small companies, this is usually the owner in larger companies, the bookkeeper/accountant. Be warned, if the owner has not bought in to the plan, it will fail.
3. Look at your staff. Michael Gerber in the E-myth Revisited reminds us that you should only hire the person with the minimum requirements for a job. Look at your staff, are they right, are some ready to retire? Can some jobs be eliminated? We all hate to cut employees, but sometimes there is no choice. Success Tip: Enlist your employees now in making your company efficient - often they have great ideas and will come up with plans that save jobs and create cash!
4. Review Fixed Costs. When was the last time you really reviewed your electric bill, phone bill, cell phone bill, water bill, insurance, rent, bank fees, taxes. It may be surprising but mistakes are made - too frequently.
5. Have a Marketing Plan. Call it a protective marketing plan so you will be preserving your customer base. Often improving your customer service can lead to repeat sales. Check your product/service mix and make sure you getting the most bang for your buck. Stay in front of the customers - if your competition quits advertising, you will be the name remembered.
6. Do the Marketing Plan. Work your marketing plan and track the results. If you do not know how new customers find you, you are wasting your advertising dollars. Take advantage of all free and low cost programs. These include coop advertising, press releases and going to the "free and low cost" meetings for organizations you belong to already. Ask to be a guest at organizations you dont belong to. Success Tip: Check out Business After Hours programs that are available in your area through the Chamber of Commerce.
7. Have a Sales Plan that is designed to increase sales volume. Review sales expenses and look into establishing sales incentives for sales people that exceed their goals. Success Tip: Remember that sales incentives need to be for new or increased sales. Selling deeper to an existing customer is just as important (and often easier) than developing new customers.
8. Sell Assets. I know, you need every ______________ (fill in the blank - ie. computer, truck, desk) because you might have a real growth spurt. Well, you can always buy used stuff at someone elses "going-out-of-business" sale. Leasing equipment or outsourcing production if possible can help with surpluses in the future.
9. Review your Debt. Look at your total debt picture. Often debt can be restructured to get a lower overall interest rate. $40,000 at 11% interest per year will have an interest payment of $367 per month. The same amount at 18% will be $600 per month. If you have loans, accounts payable, lines of credit, they may all be at different rates, get out your calculator, develop a plan and go off to see your banker. Not happy with the answer, try another banker.
10. Develop a Vision. This is usually the first thing to do on a business plan. If you are still committed to your business after doing 1-9, then make a business vision that looks beyond the problem. The Pike Place Fish Market in Seattle was drowning in red ink when owner John Yokoyama in the early 80s decided something had to change. He enlisted his employees and they developed the vision to be World Famous. It is an amazing story. Check it out at: Fish Philosophy (www.fishphilosophy.com) or Pike Place Fish (www. pikeplacefish.com). Purchase the book: Fish! A Remarkable Way to Boost Morale.
Copyright 2001 Linda Lucas Fayerweather
About the Author
This content may be copied in full, with copyright information intact, without specific permission, when used in a not-for-profit format. If other use is desired, permission in writing from Coach Fayerweather is required.
Fayerweather Coaching
lindafay@lindafay.com
http://www.lindafay.com
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