In case the sluggishness we are feeling in the economy continues beyond the election, this is a good time to revisit what to do. In periods like this, cash is king and you need to operate accordingly; you may not be able to cover up mistakes by growing revenue. Here are some additional thoughts:
- React to current conditions, not conditions you wish existed.
- Adhere to your credit policies. Don’t pick up your competitor’s credit problems.
- Keep the calculation of your cash breakeven up to date and manage your business with that in mind.
- Make use of an interactive financial model to test “what if” scenarios and drive staffing levels.
- Knowing profitability by customer, product or segment allows you to focus on areas where you enjoy better margins.
- Know your costs so that you can make strategic pricing decisions.
- Make sure you stay close to your key accounts. Your competitors will be gunning for them.
- Reposition your message to deal with current realities, i.e. promote your equipment rebuilding services, not just new equipment sales.
- Be alert to the impact of decreasing order size on your fixed costs per order.
- Keep up communications with your lender. Make sure you don’t give them any surprises.
- Take steps to speed up your financial information. Use estimates if necessary to improve the timeliness of your numbers. Use this information to quickly respond to changing conditions.
- If you get into a jam, honest communication is key. If you make promises, keep them!
- To keep your good employee base intact, consider a reduced work week for everyone or rolling layoffs of one week off one week on.
- Finally, stay positive. You can’t see where you are going if your head is down. People with negative attitudes tend to miss opportunities. The pendulum always swings back.
