When times get tough, most people think about cutting back on their expenses, which is excellent advice if they have internal waste. But watch out for the trap of decreasing your margins. You can only cut costs so much...

1. Top 10 Tips for
Recession-Proofing
Your Business

2. 1. Focus on efficiencies
When times get tough, most people think about
cutting back on their expenses, which is excellent
advice if they have internal waste. But watch out for
the trap of decreasing your margins. You can only
cut costs so much. Eventually you also need to focus
on the efficiencies of systems employed to operate
your business. For example, almost every business
could improve its production process by revamping
employee job descriptions and workflow.

3. 2. Embrace automation
While automating your production processes
may absorb some cash up front, if you can
afford it, it’s almost always worth the
investment in the long run. The timing is
usually right, because the cost of buying
equipment typically comes down in a sliding
economy.

4. 3. Train, train, and train some
more
Most business owners hire employees, and expect
them to fit right in and do a great job. Then they get
frustrated when things don’t instantly work out the
way they planned. Instead, start every new hire with
a comprehensive training program and establish a
regular training schedule going forward. Depending
on the job, this can often be accomplished in as little
as 10 min per week.

5. 4. Develop a Culture of
Excellence
This is achieved when everyone in the
organization plays an active role in bettering
the company. Most people go to work to do a
job. But in a recession-proof company,
everyone understands the bigger picture and
their connection to it.

6. 5. Develop Leadership
No company can grow its value significantly without
leaders. These are the people who are willing to take
a good idea, and run with it all the way to the finish
line. Unfortunately, this is often the exclusive domain
of one or two people at the top of an organizational
chart, severely limiting the potential of the company in
question. The solution is to give your people as much
responsibility as they can handle, pushing them to
sharpen their leadership skills on a daily basis. You
may be surprised at how well they perform, given half
a chance.

7. 6. Re-negotiate your contracts
Now is a great time to re-negotiate with
manufacturers who have seen a reduction in
their sales volumes but- in an effort to
maintain economies of scale- haven’t yet
reduced their production volumes.

8. 7. Consider ways to outsource
manufacturing
Outsourcing isn’t the exclusive domain of the “big
guys” any more. It is now possible for businesses of
all sizes to outsource some or all of their
manufacturing to other parts of the world, such as
China, India or Mexico. **However, if sustainable
business practices are important to you, make sure
you do thorough checks on the manufacturing
processes used by your outsourced suppliers,
whoever they are.

9. 8. Consider buying struggling
competitors as a recession-proofing
strategy
Though not the simplest strategy, this can be a
relatively quick way to increase market share,
reduce proportional overhead and improve
economies of scale. Taking over an existing
company has its own particular set of challenges of
course, but when it works, it can be highly effective.

10. 9. Change up your market
offering
Look at ways that either expanding or
decreasing your product offering will help
leverage the shifting economic climate.

11. 10. Secure your intellectual
property
Every business is started and built on the ideas of its
founder. And as it grows, these ideas can evolve into a wide
variety of proprietary items, providing various levels of value
to the business. These could include things like, proprietary
formulas, manufacturing techniques, company logos,
marketing tag lines, and so on. While many of these items
may be associated with the business from a customer’s
perspective, some may still be legally associated with the
owner, reducing the company's value when it's time to sell.
The good news is these types of issues can typically be
resolved fairly easily with a visit to an intellectual property
rights lawyer…

12. Mark Wardell is President & Founder of Wardell
International , an advisory group that helps business
owners plan and execute the growth of their companies. The
author of seven business books, Mark also writes regularly
for several national & international business publications.
Email him at mark@wardell.biz.