Recession, continued
Too few companies have effective plans in place so the backup strategy is to start planning as soon as sales decline, but don’t act too quickly. Recognize that economic cycles are temporary and the economy will improve in time.
Get help in evaluating your situation before acting. Develop a relationship with a mentor, banker, consultant, and a tax specialist who can advise you on streamlining your business. The Chamber of Commerce can provide you with sources of assistance. Some professionals may discount their services to earn your business when the economy improves. Get opinions from several sources before taking any action.
Steps to Survival
Develop a written plan. This is important as it enables logical thinking. The plan should include an accurate evaluation of the state of your business, and should include an evaluation of the business image, the stakeholders, your customers, competitors, and products. You should include a forecast of how long the business can operate with varying levels of revenue.
Seek new opportunities by aligning yourself with related businesses. Companies that sell products can affiliate with people who install those products to provide a one-stop solution. A person running a tool sharpening or repair business might rent space in a hardware store. Both companies benefit.
Resist the urge to quickly slash expenses, especially in the area of payroll. Good relationships with employees can be critical and some employees may prefer salary reductions to keep their jobs if everyone is making concessions. Additional training may let you build more effective employees and help grow your business.
Maintain a good relationship with anyone who provides goods or services to you. This can be your banker, landlord, suppliers, employees, etc. This is helpful if you need concessions or assistance.
The most important strategy is to know your customers. Time spent listening and helping can cement a relationship that may last many years. Customers return because the seller makes them feel important. The economy will improve and the well-managed business emerges with newer and stronger business relationships.
Keith Chiles