5 More Strategies to Successfully Deal with the Economy

Posted on | April 29, 2009 | No Comments

Joan Jakel

Last week I provided you with the first part in a two-part blog post providing you with some success tips to deal with the current economy. Here are five more tips to help you take a serious look at your business and start innovating your way to successful times.

1.    Rethink your business model. Re-examine your customers, consider their changed needs, and take the opportunity to capture new markets for your products and services.

2.    Optimize working capital. Pay extra attention to credit and collections. Reduce receivables, manage payables and decrease inventories. 1) Query major customers to find out whether they anticipate delays in payment. 2) Contact suppliers to negotiate extended payment terms. 3) Cancel any outstanding purchases that are not essential. 4) Recognize all possible expenses and losses. Don’t be shy about appropriate write-offs — including divisions and locations that no longer make economic sense.

3.    Examine all costs and operating expenses. Eliminate any that aren’t profitable, or don’t add value from a customer’s perspective. Don’t cut back on what differentiates your products and/or services. There may be a hidden opportunity if your competitors cut costs that lower their service level or product quality and you can continue yours or – even better – improve it. Don’t cut capital spending designed to improve productivity or R&D spending on new product development.

4.    Re-examine your debt and capital structure. Meet with key lenders to review your financial forecast. Know where you stand with them, and make sure their expectations are not too high. With interest rates where they are, consider new debt structures to reduce interest expenses, improve cash flow, and provide credit for acquisitions.

5.    Don’t overreact and don’t under react. Times of economic stress are like driving a car in an ice storm: Jerk the steering wheel one way or the other, and you can find yourself in an irreversible spin. On the other hand, if you aren’t looking ahead far enough or proceeding with increased caution, you won’t be able to avoid the hazards in your path. And if you’re just sitting still, you won’t be able to get moving in time to avoid the hazards coming at you.

Remember, if owning a business was easy, everyone would do it.  We do it because we are entrepreneurs – we challenge ourselves, we learn, we grow, we fail, we rebound and we succeed in a way that is personally defined by each of us.  Keep the faith and keep moving!

Here’s to your success!

Joan Jakel-Smith

For more helpful tips, check out our website at www.azbusinessresource.com

 

 

 

 

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