What's Your #1 Tip for Staying Solvent in a Recession?
Friday January 2, 2009
I've written before about how you can recession-proof your business, presenting specific things that you can do to keep your business profitable during tough times.
But today let's cut to the chase. Suppose you were able to only give one piece of advice. What's your number one tip for keeping your business solvent in a recession?
I'll go first.
I would say the most important thing you can do is to actively manage your business. When money is loose and people are spending freely, businesses can do well without being managed well. But when money gets tight, businesses can no longer afford sloppy practices and management blunders.
So if you don't already know, I would say you need to find out exactly how and where the money is flowing in and out of your business and then make the management decisions to improve your business's position.
All right - your turn. What's your number one tip?
But today let's cut to the chase. Suppose you were able to only give one piece of advice. What's your number one tip for keeping your business solvent in a recession?
I'll go first.
I would say the most important thing you can do is to actively manage your business. When money is loose and people are spending freely, businesses can do well without being managed well. But when money gets tight, businesses can no longer afford sloppy practices and management blunders.
So if you don't already know, I would say you need to find out exactly how and where the money is flowing in and out of your business and then make the management decisions to improve your business's position.
All right - your turn. What's your number one tip?
Your competitors’ businesses will be failing, so my #1 suggestion is to actively watch (and wait). When they (start to) fail, their clients will be looking for a replacement. Offer a special incentive as early as you can for them to try your services before they go hunting for alternatives.
I would agree with the management of the business cash, but a more direct No1, I would say would be collect all the debtors you can, and try to push people to debit orders, and keep your debtors to as close to cash as possible – most customers would understand if you moved your small customers to a cash only option.
You make a really important point here, I think. So many businesses will be focusing on pulling in their horns and forgetting to pay attention to what’s going on around them that there will be lots of opportunity to pick up on others’ leavings.
Definitely, Malcolm. Businesses need to check on/tighten up their own credit practices. I’m already seeing signs requesting that customers pay in cash in some small businesses locally.