Avoid Panic Decisions in Economic Crisis
Resist the Urge to Take Cover and Try to Ride out the Recession
Whether the business is targeted to the personal end user or to another business, the situation is the same. Expenditures will be scrutinized before a decision to buy is made. The panic caused by the drying up of credit is hitting everyone.
Now is the time to step up and aggressively examine the business plan currently in place, looking for chances to make changes that will strengthen the business position in this new climate and weather the storm.
While facing the prospect of reduced sales is daunting, it is important not to panic and ignore the credit limits and payment history of present customers.
Examine Your Credit Policy
Getting the money owed you will be even more important in 2009. Remember, customers are being affected by the same credit crunch, and many may be facing the possibility of closing doors or filing for bankruptcy.
Examine the customer base with an eye to what would happen if one or more of the biggest buyers defaults. New, possibly smaller accounts may need to be added to the customer base in order to limit exposure to bad debt.
Salvage the relationship with the clients who fall behind in payments by asking what terms can be negotiated to help bring these outstanding accounts up to date.
Upgrade Now
If the long term business plan includes equipment upgrades, now is the time to do it. Buy while prices are cheap. All companies are facing the same economic crisis and most are willing to negotiate prices. Ask vendors for deferred billing or extended credit payment periods.
It may be beneficial to purchase a property in this buyer's market as opposed to continuing to pay rent for business space.
Share the Pain
Be honest with employees about the business outlookIn an economic crisis, with news of more layoffs each day, many employees may be willing to make sacrifices to make jobs more secure.
Many perks can be temporarily suspended without affecting employee moral if the worker is part of the decision to cut costs when possible. From health care to catered meetings, costs saving changes can be made successfully if the employee is involved in the decision making.
Small business is regarded as the backbone of the American economy, and those business that are able to survive the current recession will be poised to make money in 2010. By boldly seeking and taking advantage of any benefit the current business climate offers, the smart small business owner can be part of the financial recovery solution.
Credit Crunch Ahead
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