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Q. I am looking for ways to navigate the recession and manage expenses without laying off staff. What are some other things I can do?
A. Sell, sell, sell. Businesses need top-line revenue to make things happen. Get all your strategy on getting revenue and cash. Watch what you dwell on each day. Keep focused on revenue.
Be careful what other expenses you cut during down times; don’t cut expansionary expenses like advertising or marketing. Keeping your company name out there gives you a much better chance of being remembered when the economy improves.
Brian Hamilton, CEO of Sageworks, says: “Focus on your company’s specific economic data, its (key performance indicators). Worrying about factors outside of your control, such as the performance of the whole economy, is a waste of time and creates unnecessary stress.”
What simple metrics drive success in your business? Manage those carefully. If you run a construction company, an important KPI is probably gross margin on projects. If you run a direct-mail company, an important KPI is return on mailings. Listen. Make great products and deliver incredibly good service. How do you get more money and sales coming in the front door? You need to listen to customers and make the best products in the marketplace. Speak to customers regularly and incorporate their suggestions. Now is the time to differentiate your business and be way above average.
Meet with your certified public accountant. The CPA may be the most under-utilized resource in business. CPAs have typically seen hundreds of businesses just like yours. Most businesspeople use their CPA only for tax work. In addition to tax work, visit your CPA at least once a year to go over financials and develop strategies.
Downturns force you to stay lean, work harder and develop new strategies.
