Business Recession Strategy

Business is slowing down and there is a lot in the news about an economic recession.

Like many businesses you have probably worked hard to build your businesses and it hurts to look at cutting costs to the bare bones and giving up some of what you have created.  Here are some options to consider as part of your business recession strategy:

1. Do continue with cost reduction but also look at profit improvement.  Use the Business Solutions Profit Equation to help guide your efforts.  Profit is a function of expense, loss and revenue.  So look at your losses (e.g. waste) for opportunities to improve and examine your revenues in detail for opportunities to improve them.
2. Reevaluate your entire pricing structure.  As costs go up, so must prices in order to maintain margins.  The caution is to avoid alienating your customers to the point where you lose margin by losing too many sales.  Test pricing to see what happens as you go up and down.
3. Think strategically.  Maybe your closest competition is not as flexible as you are and you can create a business advantage when costs and prices are under pressure.  Further, your competition and suppliers may be more willing to partner with you on ways to preserve business or create new business.
4. Look for acquisition opportunities.  As business pressure increases, competitors or businesses in complementary product lines may be looking to sell.  Market consolidation always creates opportunities for some people.  Why not you?
5. Consider investing.  Maybe this is the time to invest in that new equipment or technology to reduce costs, improve quality or gain some other business advantage that others cannot afford.
6. Watch your cash flow like a hawk.  Make sure your accounts receivable stay current and healthy.  If you are having trouble, so are your customers.  Don’t let them leave you holding bad debt.
7. Make sure to engage your employees in the process.  Everyone must be part of the quest to keep the business healthy in hard times as well as good.
8. Be slow to hire and quick to fire new employees to keep only the best.  A layoff should be a last resort.  Use some excess time and resources to get people working on cost reduction and profit improvement.  Don’t however keep people around just filling in time.  That waste will drag everyone down.
9. Talk to your bank, investors and other sources of capital.  Let them know what your business recession strategy is.  Get them to endorse it and/or give you suggestions for improvement.  The more they are involved in the strategy, the more likely they are to be there when you need more cash.  When everyone else is dodging calls from their bankers, you call yours for lunch.

An economic recession or business recession is more than a problem; it is also an opportunity.  Maybe its time you read “Instant Profits: Making Your Business Pay” for over 250 ways to improve your business even in a recession - guaranteed.

Get your costs and bottom line profits under control now