It is easy to fall prey to negative and conservative thinking when the economy slows. Many companies not only begin tightening their budgets but also start to reign in creativity and thought processes that can lead to new opportunities. The following ideas may help steer your company through the current economic climate and potentially help your business grow.
1) Be positive. Today we often hear business leaders complaining about the state of the economy and their own businesses’ overall prospects. Ensure that those in management positions are maintaining a positive outlook and spreading this enthusiasm to your employees and to the public at large, without exception. Positive thinking, and positive results, come from the top and spread quickly.
2) Be proactive. Your existing clients can be a great source of new business. Knowing your clients’ businesses, and proactively reaching out to your clients, can result in referrals to new clients or to additional work from your existing client base. Take the extra step and attend industry events that are important to your clients and join their industry associations.
3) Educate yourself. The American Recovery and Reinvestment Act of 2009, signed into law last February, makes a number of beneficial changes for businesses. Take the time to find out how the Act can help your company.
4) Manage your receivables. There is an old adage that says, “nothing happens until something gets sold.” That is true, but you can count on the fact that “something wonderful will happen once you get paid” . . . positive cash flow. Increase your focus on outstanding receivables. Reducing the average number of days of receivables can dramatically improve your bottom line.
5) Manage your inventory. Businesses often purchase excess, bulk raw materials at a discount. Moving forward, scrutinize your raw material costs from a new perspective. Instead of searching for the lowest cost, which can result in unnecessary volume, consider purchasing the minimum needed to run your business, even if it comes at a slight premium. Materials sitting on your floor are “dead inventory” taking up space, costing you money, and driving down your bottom line.
6) Differentiate and make sure people know. What does your company offer that nobody else does? What does your brand represent? Determine the best way to communicate your unique position in the marketplace and let everyone know. Loudly.
7) Don’t jump to layoffs. Before moving to a layoff consider, among other things, benefit reductions, furloughs or wage freezes and reductions. When work picks back up it is much more difficult to hire and train new employees than to simply increase the workload, and wages, of your existing staff. Also, before you layoff, be sure to work with competent HR consultants to develop a plan which is in compliance with the multiple laws applicable to employee terminations.« Back to news