<p>During tough economic times you are likely faced with many new challenges. When dealing with these challenges it is important to keep your focus and not get overwhelmed by what you cannot control. You should, however, make the time to assess your business situation and make sure you're addressing what you can control, in order to survive, adapt, and hopefully even grow your business.</p>
<p>Businesses fail in good times as well as bad. When the economy is strong, there seems to be much more tolerance for inefficiency and risk, but when the economy is sour, there isn't. To reduce the risk of failure, it is important to make an honest assessment of your situation and take the necessary steps to remain a viable business. Many business owners are experts in their core product or service, but need help in developing and running the business itself. </p>
<p>Below are four categories containing tips you can use to help assess your situation, develop plans, and act on to retain a viable business:</p>
<ol>
<li>Financial Health </li>
<li>Strategic Plans</li>
<li>Customer Retention</li>
<li>Business Development</li>
</ol>
<p><strong>Financial Health</strong></p>
<p>During tough economic times, in particular, it is critical to be diligent about staying on top of your financial health. Understanding where you are financially will allow you to be more proactive in avoiding or addressing potential problems. Regarding your financial situation: </p>
<ul>
<li>Be diligent about managing your cash flow. It is essential to forecast the cash likely to come into and go out of your business. Make sure that planned expenditures are in line with accounts receivable. Forecasts should cover at least 3-6 months out. You need to manage your cash flow to avoid a shortfall. </li>
<li>Review your expenses to determine which expenses are essential vs. non-essential. If the non-essential expenses aren't related to activities that are adding value then consider cutting it out. </li>
<li>Assess your inventory. If it's building up, focus on converting the inventory into cash.</li>
<li>Reduce debt or take the necessary measures to stretch it out.</li>
<li>Look to improve receivable collections turnaround time. Send invoices as close to product or service delivery as possible. Send invoices electronically to reduce mail time. </li>
<li>There may be opportunities to negotiate with suppliers for lower costs on supplies or better payment options.</li>
<li>Seek to negotiate better rates on financing with lenders. If you have a sound plan, reflecting your cost cutting actions, then lenders may work with you. It is in their best interest, if the alternative is that you would not be able to pay back the loan.</li>
<li>Investigate insurance rates to see if you can reduce premium costs and maintain an appropriate risk level.</li>
<li>Evaluate your office space. Perhaps you can work out a longer term lease with a lower rate, or investigate subletting office space if your contract permits. </li>
<li>Spend for value, with the result being increased sales or reduced costs. Consider delaying large purchases or plans that will take a long time for the return on investment to be realized. </li>
<li>Perform a staffing evaluation. If the workload can still be supported, consider cutting back hours through work schedule changes. You may need to consider down-sizing staff as well. Outsourcing some functions may help you do more with less and remain focused on your core business.</li>
</ul>
<p><strong>Strategic Planning</strong></p>
<p>Establish a clear vision on what your business is trying to achieve along with a plan to meet your goals. For strategic planning:</p>
<ul>
<li>Make sure you have goals defined for the short term and long term. Define measurable objectives so you can plan, execute, and monitor results. Communicate the goals and objectives to your whole staff. </li>
<li>Identify your business strengths and weaknesses. You should look to capitalize on the strengths and eliminate or improve on the weaknesses. </li>
<li>Identify business opportunities and seek ways to take advantage of them. Perhaps there are technological advances that are worth pursuing, or social trends, or special events you can take advantage of. Looking at what is going on around you, whether internal or external, can help you find opportunities. </li>
<li>Identify your competition and evaluate how you compare to them on price, service, and range of goods and services. Understand how you stand out from your competition and capitalize on that. If you don't see your business standing out in some way, then nobody else will either.</li>
<li>Perform a business risk assessment. Identify areas of risk to your business, evaluate them, then develop and execute mitigation plans.</li>
</ul>
<p><strong>Client Retention</strong></p>
<p>Acquiring clients can be challenging. So when you do obtain a client, you need to provide them with a quality product and excellent service to retain them. To help retain clients:</p>
<ul>
<li>Make sure your idea of excellent service is in line with your customer's expectations.</li>
<li>Do not sacrifice quality in your product or service. </li>
<li>Measure customer satisfaction. </li>
<li>Train your staff accordingly to provide excellent service.</li>
</ul>
<p><strong>Business Development</strong></p>
<p>Now more than ever it is essential to market your business. The trick is finding the right medium to reach your target demographic. To help develop your business:</p>
<ul>
<li>Evaluate how your advertising dollars are being spent in order to make sure you are marketing cost effectively and can measure results.</li>
<li>Monitor your competitors' advertising</li>
<li>Re-examine your marketing mix and make sure you focus your marketing effort on your target audience</li>
<li>Market to convince prospective customers that your product or service is a wise investment, especially since money is tight.</li>
</ul>
<p>The process of analyzing your business is not a small task, and like many entrepreneurs you probably have enough of a struggle accomplishing your day-to-day work. However, the one thing you should not do is ignore the fact that this process needs to be done. Even if you know your business isn't in trouble, which is great considering these difficult times, the opportunity cost of not going through this process may prevent you from being as successful as you could be a year from now. Imagine actually growing your business during these hard times. If it is impossible to find the time to go through this process, then your business may have reached a growth plateau. For you, the potential lost income is even greater than for an entrepreneur who sees his business failing.</p>
<p>Even if you cannot find the time to go through this process yourself, or you lack the expertise in any of the above categories, then it is beneficial for you to speak with a professional who can help you streamline your business and maximize your revenues. Many consultants in this field offer discounted consultations, so you can see what potential your business has. You would benefit greatly by taking advantage of such an opportunity.</p>
<p> </p>
2009-05-22T17:39:36Z
2009-05-24T16:46:33Z
-7.38803
306
4718
true
2
33683
business-tips-in-a-tough-economy
2
2009-05-24T23:45:59Z
2009-05-24T16:46:33Z
Economic conditions can wreak havoc on businesses. Here are tips to help you manage your business more proactively and increase its ability to survive and grow.
Business Tips In A Tough Economy
1
2009-07-06T22:34:04Z