Here are 10 tips for keeping your business in business during the economic crisis:
No.1 - Protect Your Revenues
Without revenues, you don't have a business. Protect your revenues by making sure that you don't lose key customers. Double up your customer service efforts and increase face time with customers. Don't lose a customer simply because you neglected to stay in touch and ask how they were doing.
No. 2 - Keep a Close Eye on Cash
Cash is king, because credit is tight. Keep a rolling cash forecast, 90 to 100 days out. Many profitable businesses have gone under in a down economy simply because they weren't watching their cash flow closely and ran out of money. Don't make that mistake.
No.3 - Tighten Your Credit Policies
The days of offering Net 90 terms to your customers are long gone. The more liberal your credit policies, the more likely you are to get burned. Tighten up your credit terms, especially for high-risk customers that you anticipate may run into problems.
No.4 - Revise Policies to Reflect the Times
Reevaluate your purchase processes and signoffs. For example, if you have a $5,000 signoff limit on purchases made by employees, you may want to lower that limit to $2,500 just to be safe. Every policy should be reviewed through this important lens: does this policy still make sense given the current state of the economy?
No.5 - Rebid Key Contracts
Now is the time to renegotiate contracts and look for deals. For example, review your telecomm contracts. Can the current provider offer a better deal? Is one of their competitors willing to offer a better price? You can save a bundle simply by shopping for better deals.
No.6 - Set the Tone of Frugality
Change the tone on how your organization views expenses. At SurePayroll, two colleagues and I recently flew into Columbus, Ohio and then drove to Cincinnati for a meeting. We could have paid for a more expensive fare that would have gone direct to Cincinnati, but instead, we chose to save the company $1,500 and enjoyed some extra time together. More importantly, everybody at SurePayroll got the message: in this tough economic environment, we need to treat every dollar as being a precious commodity that cannot be wasted.
No.7 - Upgrade Your Team
In a down market, don't tolerate poor performers. Fire your worst employees. Sure, you'll be setting them loose into a tough job market, but now is not the time to be paying for mediocrity. For employers looking for talent, it's a buyer's market. Upgrade your employees. After all, getting the right team in place may be critical to surviving this downturn.
No.8 - Outsource to Improve Your Bottomline
Take advantage of inexpensive outsourced resources. If it can be done well by somebody else and can be done more affordably than having your internal resources do it, it's a good candidate for outsourcing.
No.9 - Consider Changing the Business Model
In tough times, a less than stellar business model can become downright bad. Now is a great time to be honest about what hasn't been working and change things for the better. If one aspect of your business is underperforming, it may make sense to close that line of business down and shift all your resources to the parts of your business that are still doing fine.
No.10 - Take Time to Recharge Your Batteries
You may have to work a little harder to do well in this economic climate, but make sure you don't burn yourself out. Take some time for yourself, spend some time with family, and recharge the batteries. If nothing else, it will remind you that there's more to life than just running your business.