You Can Be Successful in a Recession

p We may be in a pretty bad recession right now and have many questions as to the future. Questions that arise include: Can A Business be successful in this Recession? Is this a Good time to Start a Business? Should you be looking for business capital in this Recession? The simple answer is YES! (And no, I am not crazy!) This article will provide you real situation advice on how to be profitable and successful in this tough economic market, whether you have been in business a while or looking to start a new venture. You have to be careful how you operate and grow your business in a recession since the stakes are higher and mistakes costlier. Consider hiring an experienced a href=http://www.businessconsultingabc.com/What_Does_a_Good_Business_Consultant_Do.htmlBusiness Consultant/a to help you with your recession strategic planning. Experience counts for a lot in a recession!/p
pstrongRecession Survival Planning/strong/p
pEd Hess, author of ldquo;emSo You Want to Start a Business? 8 Steps to Take Before Making the Leaprdquo;/em, says the first step is to ldquo;analyze why yoursquo;re in trouble, why yoursquo;re losing customers or why customers arenrsquo;t paying you fast enough.rdquo;nbsp; I canrsquo;t agree more.nbsp; You need to rework your Companyrsquo;s a href=http://www.businessconsultingabc.com/Writing_An_Effective_Business_Plan.html target=_blankBusiness Plan/a, Customer Plan and Supplier Plan to come up with a Survival Plan to cash-in on the opportunities a Recession provides.nbsp;/p
pstrongemMaintain Cash Flow in a Down Economyhellip;/em/strong/p
ol
listrongemDiversification:/em/strongnbsp; Dan Leader, Owner of Bread Alone, a wholesale and retail bakery with three outlets, used diversification to maintain his $7 Million in Annual Revenue.nbsp; One third of the business is targeted on Retail Stores, one third on wholesale distributors and the other third concentrates on Mail Order and On-line Sales.nbsp; This way if one sector is hit hard in an economic downturn, the business has two other Sectors to pick up the slack./li
listrongemContingency Plans:/em/strongnbsp; Just like you have an Emergency Fund in any good Personal Financial Plan, you should establish an Emergency Fund for your Business.nbsp; Mr. Dennis Ceru, adjunct professor, Entrepreneurship and Business Strategy, Babson College, recommends planning for ldquo;rainy daysrdquo;, putting aside 3 to 6 months operating capital and remuneration.nbsp; Include in your Business and Strategic Planning an Emergency Plan for cutting costs.nbsp; Another option during a down economic period is to send out invoices the day of a sale with cash discounts for early payment, say within a week.nbsp; Waiting 30 days to send out invoices, during tight times, can be a strain on cash flows.nbsp; Managing Cash during a downturn is crucial so your Budgeting Process in your Companyrsquo;s Strategic Plan is vital.nbsp; Other strategies could call for leasing verses purchasing or hire part-time labor verses full time employees.nbsp; You just need to survive until things turn around, and you can implement recession strategies. /li
/ol
pstrongCost and Cash Recession Management Strategies/strong/p
pCost and Cash Management are crucial during tough economic times.nbsp; Here are some great Recession strategies to employ:/p
ol
listrongemExpand your business into profitable areas without needing additional capital:/em/strongnbsp; Dan Leader of Bread Alone, a New York wholesale and retail bakery, sets aside one to two days a week to make sales calls on new customers that have multiple locations, which can yield $100,000 in annual business.nbsp; Mr. Leader presented new wares offerings to Whole Foods, Zabars and the like which generated a surge in large orders./li
listrongemWeed out pricy Customers:/em/strongnbsp; Analyze your Customersrsquo; profitability, create a ldquo;perfect customerrdquo; profile and concentrate on that customer type.nbsp; This will help you to be more profitable on a per customer basis, which is much less of a strain on Company cash flows during hard economic times.nbsp; Concentrate on higher net profits per customer verses high volume sales with less profitable customers./li
listrongemExamine your Technology Costs/em/strong: Running an efficient business frequently centers around technology but be sure that you have what is necessary for a good rice during recessions. Being heavy on technology costs can be hard to justify when you are fighting to just retain customers. Do careful analysis of the necessity and effectiveness of the technology that is available, considering all options. Negotiate terms which you can easily meet or else look at alternative sources. You must be able to cash flow sustain your technology systems. You Technology Plan needs to consider things like: low acquisition cost per unit, high per unit profitability, platform flexibility are just some of the factors to consider./li
listrongemPoor Employee Performance/em/strong during tough economic times canrsquo;t be neglected.nbsp; Ensure you have a suitable Performance and Control Mechanisms in place to proactively manage your human assets./li
liOn the flip side, strongemretain your talented people/em/strong even though they may be expensive.nbsp; Experience prevents mistakes, which can be very costly.nbsp; Your most expensive employees to hold on to should be your most productive ones.nbsp; They can pick up the slack during company cut-backs./li
liAnalyze the strongempayoff of your Marketing Dollars./em/strongnbsp; What particular strategies are paying off?nbsp; At what profitability?nbsp; What is the ratio between marketing dollars spent and the resulting unit / customer profitability?nbsp; Exploit your high profitability areas and refrain from generalized Marketing Strategies.nbsp; Analyze your a href=http://www.businessconsultingabc.com/Developing_and_Writing_A_Winning_Marketing_Plan.htmlMarketing Plan/a to shape the best target, niche markets and the most profitable methods of selling to those targets. /li
liTo strongemretain those highly talented, skilled, experienced people/em/strong in recessionary times, you must continue to offer good benefits.nbsp; Donrsquo;t cut your benefits to save on costs and expect your best people to stick with you when things are tough./li
/ol
pChris Pentillarsquo;s Article, emldquo;Employee Benefits in Todayrsquo;s Economyrdquo;strong,/strong/em in the January rsquo;09 Entrepreneur Magazine, gave some great tips in holding key employees:/p
ol
liProvide Breakfast at Staff meetings/li
liLunchtime training Sessions/li
liPresenting employees CASH bonuses for meeting company goals/li
liEmployee cost-shared in-house day care/li
liMatching Employee 401(K) Contributions even during business slow periods/li
liCompany principals tell the employees the Truth, sharing information about the Companyrsquo;s Budget so Employees understand how they can positively affect the bottom-line./li
liDuring tough economic times a business owner may have to scale back perks but do it with the participation of company employees/li
liUnderstanding how employees will react to changes in perks or benefits is key to a good Company Communications Plan/li
liOffer Discount programs on a range of consumer commodity for employees to offset benefit cuts the company has to make, such as having to increase the Co-pay on an Insurance Policy/li
liMake a strong link between Perks and Performance:nbsp; Work flexible hours; work-life balance initiatives; work at home, telecommute; and giving more responsibilities to a high achiever are some ways a Company can offer performers unique perks which they have earned./li
liMentoring and training programs/li
liRecognizing Volunteer work and endorse a company-wide volunteer event or cause/li
liStrong ties with the Community/li
liGas discount cards/li
/ol
pstrongPlease, At All Costs, Refrain from Across the Board Cost Cutting!/strong/p
pAcross the board Cost Cutting is a emdespairing measure/em.nbsp; Effective Cost Management should be a day to day tool you employ in your Companyrsquo;s operations.nbsp; When times get tough, the Cost Management System you have in place will pay off large dividends, while making you very profitable during boom times.nbsp; Cost Management should be an integral part of your Companyrsquo;s Strategic Plan, Product Development Plan, Marketing Analysis, and Market Plans./p
pWith effective Survival and Cost Management Plans and Systems in place, your Company will be well situated to cash in on the limited availability of Business Capital in the loaning market.nbsp; Tough economic circumstances really tighten lendersrsquo; purse strings, so it is important to concentrate on Funding Strategies which can be successful in such conditions. If you canrsquo;t get enough or the right capital to grow in a recession, then cash and cost management becomes critically important. One feeds the other. Good cash and cost management leads to the capital markets opening up to your business, providing you sources of capital your competitors may be failing to obtain. Cash is king! (it really is)/p
pstrongAbout the Writer/strong/p
p Frank Goley is a business consultant, business turnaround consultant and business plan consultant for ABC Business Consulting. He has been helping companies to succeed for many years. Frank wrote his first business plan over twenty years ago. He is an expert in developing business plans, marketing plans, funding plans, strategic plans, turnaround plans, web marketing strategies,nbsp;and project specific business plans. Frank is also a business coach and a web development, web marketing and web seo consultant. Frank is the author of a business plan book, emThe Comprehensive Business Plan Workbook ndash; A Step by Step Guide to Effective Business Planning/em, and he has over 50 published articles and e-books on business success strategies. He also writes the Business Success Strategies Blog./p