Wednesday, January 28, 2009

Preparing for the downturn

By now, if you have not put your small business in a strong position for the economic slowdown, then you are likely having sleepless nights. We can all hope that the worst is over, but chances are that it is only beginning. Keeping in mind that the overall goal for you, the small business owner, is to come out of the recession with what you went into it with, then you may want to do some of the following:

1. Be sure you have plenty of cash. This means talking to your banker to be sure you have a line of credit to carry all the business expenses for 3 months. If you don't have this line set up already, get to work on it now.

2. Keep your receivables down. Everyone is feeling the pinch, so make sure you are collecting on all your invoices quickly. Anything that passes 30 days should be pursued with all your strength. The longer it goes, the worse it gets.

3. Make sure you aren't paying for deadwood. I know it seems heartless, but if you have employees that aren't performing, then you need to get rid of them before they pull your good employees and you down.

4. Get back to being a guerilla. Don't forget to beat the bushes for new business. Now is the time that all that great customer service you have been working on for years should pay off. Provide a needed and valuable service to your clients and they will use you. Call people and talk to them like people. You don't need to spend money to do this, just time.

5. Keep your employees informed on where you are and where you need to be. I never subscribe to the secret finanancial planning. If you need to hit a number in revenue to make things work, let everyone know. They won't ask for a raise, they may just rise to the occasion.

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