I know, I know. My January 1 post was very optimistic and the title of this post might sound like everyone should go into survival mode. The recession started a year ago and it looks to go one for at least the next 2-3 quarters.
Like I have said previously, now IS a good time to do great things for the future.
I have read tons of advice around the web and I have come up with five things that have worked for me in past economic downturns.
1.) Manage Your Cash Flow. People always say that cash is king. It is true and for a small business it is the difference between life and death. Crack open your accounting software and really look back at your previous year and how your cash went in and out. See if you noticed there were time periods were business picks up or is really slow. You need to prepare for things to be slower in the good periods and really slow in the normally slow periods. It is harder to get business lines of credit these days if you need to bridge for 60-90 days. But sometimes when you have employees and must make payroll, you gotta have the option. Having a good cash position makes you look good to a bank and having confidence you can pay it back will keep you going through this period.
2.) Launch new products or services. Now is the perfect time to test the market for new ideas. A recession gives you the opportunity to step back, rethink and review all sectors of your operation. While many are just thinking about staying quiet and surviving, you should consider launching a new product or service not currently offered in your market. Use the time to test out what is working and what doesn’t. This will help you diversify your products, services or industries so you don’t have too many eggs in one basket. Not only that but you will have launched something that has value during a tough time which means selling during good times will be super easy.
3.) Avoid death by frivolous discretionary spending. Think of all the little expenses $10-100 that you spent in 2008 on things. They are like little cash flow paper cuts that can bleed you dry. In good times many people most people don’t really look hard at expenses because they are profitable and can afford it in the name of “doing business”. It is time seriously evaluate all expenses and more effective use of free services and alternatives to accomplish the same things you did before.
4.) Take customer service to a new level. Great, you still have customers. Love them 10X more than you ever have before. They know that now is the time when they can look at alternatives and you seem too aloof or don’t seem to value their business, they are gone. Take nothing for granted. Make sure your pricing is competitive, your service is exceptional and your attitude reflects how much you value their business.
Also, open up that Rolodex and call dormant customers and see what you can do to bring them back. Sometimes it takes as little as just asking to restart a relationship. Resurrecting a past customer is less expensive than finding and breaking in a new one. One other thing – Ask your customers for referrals.
5.) What ever else you do, don’t stop marketing. Most companies that are cutting the budget sacrifice marketing first. WRONG MOVE. You should never stop marketing. In fact in quiet times like these when people are afraid to spend money you SHOULD BE LOUDER. And for those out there that think sales and marketing are the same thing – they aren’t. Low cost but effective things you can do to market and have conversations with people are to attend networking functions, spruce up your Web site and leverage social media effectively. You can also go the traditional route by sending out post cards or put out a new sign in front of your office if that applies to you.
What’s in your brain?
So do you have any things you are doing with your business to ride out this challenging economic period? Please share in the comments below.Google+