EduMaticsMagazine1

SURVIVAL TIPS SURVIVAL TIPS FOR MANAGING YOUR BUSINESS IN A DISMAL ECONOMY Running or managing a small business often leaves minimal time to keep track or national, and even regional, economic indicators that might affect your in- dustry and your specific operation. Yet, conditions such as interest rates, inflation, gross national product, stock prices and consumer confidence have direct impact on your business profitability and on relationships with your vendors, customers and even your employees. During these dismal times in our economic decline, whether widespread or cyclical for a particular type of business, entrepreneurs are most likely to bear the brunt. Thus, the fact that conditions are shifting opens up opportunities for resourceful firms to outsmart larger competitors who, during the downturn, carry on business as usual are unable to adapt quickly. Larger firms adapt to these changes by lying off employees. The bright side is that innovative small firms can: • Gain market share by taking it away from com- petitors unable to adjust to shifting market conditions • Maintain a strong cash stream throughout the downtown, in contrast to other companies that may have liquidity problems • Become a leaner, more cost-effective and more efficient operation, better positioned to do well when the market improves The challenge for entrepreneurs is to be aggressive and imaginative. Entrepreneurs who survive and even prosper during economic downturns must be able to look beyond the present to overcome the constraints of tradition, to see the firm from a new perspective, and to business more effectively and efficiently. Here are some recommendations for small business owners to follow during economic upheavals: 1. Watch your inventories carefully, but don’t hold them down so tight that you’ll lose sales. 2. Taking that point further, monitor your cash flow very diligently, and forecast it monthly to ensure that expenses and planned expenditures are in line with ac- counts receivable. 3. Separate the “nice to do” from the “have to do” and eliminate nonessential expenses as much as possible. 4. Reduce or stretch out debt, and build up your capital reserves. 5. Get aggressive with collections. 6. In a related vein, look hard at spending capi- tal. 7. Strengthen your banking relationships, which include letting lenders know your company’s financial position. 8. Look for opportunities to reduce rented space. 9. Now is the time to be prudently aggressive in the marketplace. 10. Similarly, don’t skimp on service and quality by being understaffed. 11. In strategizing how to build your customer base and induce current customers to raise revenues, the importance of good service cannot be over- stressed. 12. Historically, many businesses reduce adver- tising and promotional expenditures rather than slash fixed costs during hard times. 13. Another mistake during recessionary times is to reduce training budgets. 14. Get employees involved in policy choices as well as tactics and implementation—asking for ex- ample, if costs can be cut 15 percent without layoffs. Business owners, you now have an ally to improve business practices…EduMatics®! Sign up for a work- shop today at EduMatics®. We are in this together! See our website or newsletter for Workshop/Seminar listings at: www.edumaticsprogram.com or call 407.656.0661. BUSINESS

EduMaticsMagazine1

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