10 Rules for Surviving the Recession
In an economy as tough as this
one, you may need to change your business drastically to pull through.
Nearly every business
has felt an impact
from the recession. There has been no escaping. The root causes were universal
and had a domino effect.
Some small-business owners believe they've seen the bottom and they are
surviving -- they are OK and they expect to persevere with modest adjustments.
These small-business owners are kidding themselves. The bottom has not been
reached, and it will be a long slide until it does. We are in for a five- to
10-year disaster.
Defeat
the Downturn
During such times, it's easy to panic. Panic, which is fear-driven and not
based on fact but on emotion, has tremendous power, the power to change the
direction of business. But do you want to give in to panic, throw your hands in
the air and accept self-destruction, actually accelerating it, becoming a part
of the panic, stimulating more?
There's
an alternative to panicking. We are confronting change, and change is an
opportunity for advances. Now you have the choice to take advantage of change
it or allow yourself to be buried by it.
Make the right choices
today and see the results tomorrow. It’s not just about adjusting prices -- you
need to broadcast your differences, tell people why they should shop with you,
provide them with added value, and not discounts, and watch your business
grow
in a down market.
Be
a leader, and the people will follow. As a small-business owner, you can help
lead the way out of the recession. Start with your employees, move to your
vendors, and then support your customers and your market area. Announce the
good news, and everyone will line up.
Here
are 10 rules of engagement that will help you successfully recast your business
and succeed in the new economy:
Evaluate and eliminate excessive debt. If your revenues have
dropped, you may not be able to service the debt you took on when your revenues
were much higher. Any debt can be worked out --secured debt, loans guaranteed by the Small
Business Administration, mortgages, lines of credit, and even leases.
Downsize. If you haven't
already, reduce your headcount and overhead. You can deliver the same amount --
or more -- by increasing productivity.
Track your finances daily -- and start today. Install a key
indicator system to track your business and have daily, weekly and monthly
financial reports issued. Follow profitability per job, per week, per client,
per product. Use these indicators to focus on your most profitable products or
services. Make nothing that does not bring in a profit.
Reduce inventories and overhead at any cost. Look for items that
does not move or turn frequently. That's where your cash is locked up -- in
your cost of materials, labor, and so on, waiting to be turned into cash after
it’s sold and the receivables collected. This can result in a huge cash drain.
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