Surviving the financial clampdown
- 17 December, 2008 22:00
We all know 2009 could be hell. As we head into unknown waters, we should at least be prepared for what might lie ahead. In this column I suggest a 16-point business protection action plan. The following steps can help you ride the wave, rather than have it swamp you.
1. Don’t confuse expenses and investment. Now is the wrong time to cut back on things that will drive business and sales.
2. Sharpen up your marketing. In a tough market you need a strong brand more than ever.
3. Hold your nerve on marketing spend. You can make more noise for less in a declining market, particularly when your competitors are hunkering down.
4. Rank your people in value by drawing up a matrix. Rate all your people from the most important/valuable to the least important/valuable. Then do the same on what people get paid in your organisation. If you have 30 people and someone ranks number three on the pay scale but number 28 in importance to the company, do you need him? This simple exercise is invaluable and might throw up a few surprises.
5. Look after your cash and do that cashflow projection right now.
6. Don’t screw your suppliers, you don’t like it when they do it to you.
7. Draw up a contingency plan. Know how you would deal with your revenues falling by 30 percent, should it happen.
8. Look after your customers. Love your existing clients to death, they could be your lifeline in tough times and provide incremental revenue opportunities.
9. Don’t drop your prices. People will be looking for bargains. Though that can mean adding value as opposed to dropping prices, which will cost you in the long run.
10. Keep staff informed of how the company is doing. Communication is king in tough times. Most of the time people will knuckle down if they know times are tough, but you need to be open and honest with them.
11. If you do have to make cuts, make a genuine difference and don’t annoy people by cutting small things that provide no material saving. Cutting the Friday afternoon chips and nuts won’t make any difference to your bottom line.
12. In every downturn there are opportunities. These will often be missed by your competitors, if they are focused on internal issues rather than external opportunities. Keep scanning the horizon and try to spot new activity that could result in additional business.
13. Find cost-effective ways to reward your staff for going the extra mile. If you don’t have any ideas, ask your accountant.
14. Get your team to come up with ways for driving efficiency in the business. If they come up with ideas, they are more likely to be implemented.
15. Don’t forget how to celebrate. Even in tough times a good win should be celebrated, because it’s often more hard-fought and critical to the business.
16. Relish the challenges a tough market brings. Get your decision making right and you’ll ride the wave in the end.
Bob Pinchin is the director of Sway.tech, a specialist communications house for technology companies. Email: firstname.lastname@example.org