Friday
Sep122008
7 Tips for Surviving a Recession
Wizard Partner Chuck McKay recently finished a 7-part series titled 'Surviving The Recession'. In true Chuck style this series is well researched and detailed. You may agree with all points raised. You may shake your head at some. It doesn't matter. Take the time to read, pick what you like, and start implementing.
Under each topic heading I selected a random piece of advice from that particular article. Make sure you click the link to read the full story.
1. Focus on Revenue and Customer Service
With fewer customers you'll be tempted to reduce the number of customer service personnel. Many of your competitors will. Don't do it. Of course now is the time to cut expenses, but not in ways that touch the customer.
Read the full story
2. Cherish Your Existing Customers
Do you treat every customer as if they were your best customer? Maybe it's time. Some of these basics should be automatic. Respect your customer's time. Keep your promises. Keep your customer in the information loop. Deliver the same day your customer purchases. Show genuine interest in your customer's satisfaction and success.
Read the full story...
3. Accelerate Your Advertising and PR
Study after study has delivered the same results: companies who pull in their resources and hunker down to ride out the economic uncertainties fall way behind when things get better.
Those same studies show that companies who aggressively pursue revenue in good times and bad leapfrog over their competitors in the following years.
Conclusion: Do not interrupt your advertising during tough economic times.
Read the full story...
4. Adjust Your Staffing
Sort your people into four groups – A, B, C, and D. This sort has nothing to do with rank. A great cashier may be more valuable than a so-so executive.
Your A group are the excellent employees that you couldn't get along without. Tell them how important they are.
The B's are good, consistent performers. Tell them, too, that they're important to your company's future.
The C group are average. Determine which of them can grow into the B list, and make sure they understand that their jobs are secure as long as they stay focused on helping your company through the rough times.
The D's are under-performers. They, along with the C's you can't grow, should be cut immediately.
Read the full story...
5. Lower Your Profit Margins
Reduce your margins by enough to stop the bleeding. Ten percent? Fifteen? You'll have to keep close tabs on your costs, your volume, and your margins, but there is a number that will spur sales enough to keep you profitable.
But don't just drop prices. Make it part of a promotion so that shoppers take action NOW, and so that you'll have less resistance to raising those prices again in a few months when the economy improves.
Read the full story...
6. Speed Up Cash Flow
Have you checked your customer's credit history, recently? You should. All of them, including those who have (so far) paid on time.
Those with questionable payment history can be expected to delay their payments again during a cash crunch. Be prepared to cut back on their credit lines, and keep a close eye on potential defaults.
As soon as you detect a problem, get them on the phone. It's much harder to ignore a phone call than a collection letter. Besides, your diplomacy will be even more appreciated in a one-to-one conversation.
Read the full story...
7. Cut Overhead
Its not likely you'll find one big cut.
What's very likely is that you'll find several smaller cuts that will add up to significant amounts, and every dollar you save can be the equivalent of ten dollars in before tax earnings. You can't save your way to prosperity, but this exercise will help you find ways to free up operational cash.
Question every single expense. Look everywhere for savings. Do you need six incoming telephone lines? Do you need company box seats at the stadium? Do you need a company membership to the country club?
Read the full story...
PS. Need help implementing some of Chuck's advice. Give him a call (304) 523-0163 or send an email.
Under each topic heading I selected a random piece of advice from that particular article. Make sure you click the link to read the full story.
1. Focus on Revenue and Customer Service
With fewer customers you'll be tempted to reduce the number of customer service personnel. Many of your competitors will. Don't do it. Of course now is the time to cut expenses, but not in ways that touch the customer.
Read the full story
2. Cherish Your Existing Customers
Do you treat every customer as if they were your best customer? Maybe it's time. Some of these basics should be automatic. Respect your customer's time. Keep your promises. Keep your customer in the information loop. Deliver the same day your customer purchases. Show genuine interest in your customer's satisfaction and success.
Read the full story...
3. Accelerate Your Advertising and PR
Study after study has delivered the same results: companies who pull in their resources and hunker down to ride out the economic uncertainties fall way behind when things get better.
Those same studies show that companies who aggressively pursue revenue in good times and bad leapfrog over their competitors in the following years.
Conclusion: Do not interrupt your advertising during tough economic times.
Read the full story...
4. Adjust Your Staffing
Sort your people into four groups – A, B, C, and D. This sort has nothing to do with rank. A great cashier may be more valuable than a so-so executive.
Your A group are the excellent employees that you couldn't get along without. Tell them how important they are.
The B's are good, consistent performers. Tell them, too, that they're important to your company's future.
The C group are average. Determine which of them can grow into the B list, and make sure they understand that their jobs are secure as long as they stay focused on helping your company through the rough times.
The D's are under-performers. They, along with the C's you can't grow, should be cut immediately.
Read the full story...
5. Lower Your Profit Margins
Reduce your margins by enough to stop the bleeding. Ten percent? Fifteen? You'll have to keep close tabs on your costs, your volume, and your margins, but there is a number that will spur sales enough to keep you profitable.
But don't just drop prices. Make it part of a promotion so that shoppers take action NOW, and so that you'll have less resistance to raising those prices again in a few months when the economy improves.
Read the full story...
6. Speed Up Cash Flow
Have you checked your customer's credit history, recently? You should. All of them, including those who have (so far) paid on time.
Those with questionable payment history can be expected to delay their payments again during a cash crunch. Be prepared to cut back on their credit lines, and keep a close eye on potential defaults.
As soon as you detect a problem, get them on the phone. It's much harder to ignore a phone call than a collection letter. Besides, your diplomacy will be even more appreciated in a one-to-one conversation.
Read the full story...
7. Cut Overhead
Its not likely you'll find one big cut.
What's very likely is that you'll find several smaller cuts that will add up to significant amounts, and every dollar you save can be the equivalent of ten dollars in before tax earnings. You can't save your way to prosperity, but this exercise will help you find ways to free up operational cash.
Question every single expense. Look everywhere for savings. Do you need six incoming telephone lines? Do you need company box seats at the stadium? Do you need a company membership to the country club?
Read the full story...
PS. Need help implementing some of Chuck's advice. Give him a call (304) 523-0163 or send an email.
Advertising