Checklist For Business Owners In An Economic Downturn

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What business owners should be doing in an economic downturn to keep their business running and prepare to hit the ground running on the upturn

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Checklist For Business Owners In An Economic Downturn

  1. 1. Checklist for Business Owners in an Economic Downturn
  2. 2. <ul><li>In an Economic Downturn…. </li></ul><ul><ul><li>There’s added stress on the Business Owner </li></ul></ul><ul><ul><li>Things get very quiet </li></ul></ul><ul><ul><li>Orders slow down </li></ul></ul><ul><ul><li>Payments slow down </li></ul></ul><ul><ul><li>Employees get nervous </li></ul></ul><ul><ul><li>Banks & Suppliers get nervous, too </li></ul></ul>
  3. 3. “ The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy” - Martin Luther King, Jr.
  4. 4. <ul><li>In an Economic Downturn, the Business Owner must…. </li></ul><ul><ul><li>Focus on keeping the business running while generating minimal pain to the customers, the suppliers, the lenders and the employees </li></ul></ul><ul><ul><li>Plan what to do in preparation for coming out of the downturn and “hitting the ground running” </li></ul></ul>
  5. 5. Sounds great, but Exactly what do I need to do?
  6. 6. I worked with Business Owners, Lenders, Suppliers, and Employees through periodic Up’s and Down’s. I’ve developed and shared a checklist of 20 key things Business Owners need to be doing, now. Let’s get started
  7. 7. “ I always tried to turn every disaster into an opportunity” - John D. Rockefeller
  8. 8. <ul><li>Your Employees know the least about what’s actually going on </li></ul><ul><li>They are constantly hearing negative comments or rumors about the future of the business </li></ul><ul><li>If they’re not sure, they’ll always expect the worst case scenario </li></ul><ul><li>Get your employees together often and tell them your plans and next steps for the Company and how it effects them. </li></ul>1. Over-communicate with your Employees
  9. 9. <ul><li>Eliminate as many unnecessary, non-important, non-strategic expenses as possible </li></ul><ul><li>Postpone non-urgent expenses </li></ul><ul><li>Talk to your suppliers and lenders about partial payments </li></ul><ul><li>You need to make payroll which may require you to </li></ul><ul><ul><li>Cut Headcount </li></ul></ul><ul><ul><li>Everyone takes a salary cut </li></ul></ul>2. Watch your Cash Flow
  10. 10. <ul><li>Remember….The worst thing they can do, if you ask for a concession, is say, “No” </li></ul><ul><li>Start with your Suppliers. Ask to </li></ul><ul><ul><li>Reduce Product Costs </li></ul></ul><ul><ul><li>Improve Payment Terms </li></ul></ul><ul><ul><li>Reduce Order Quantities and Minimums </li></ul></ul><ul><ul><li>Reduce Shipping Costs </li></ul></ul>3. Renegotiate Everything
  11. 11. <ul><li>Do you have an opportunity to consolidate 2 or more Suppliers of the same type product? </li></ul><ul><li>You can </li></ul><ul><ul><li>Reduce product price </li></ul></ul><ul><ul><li>Become a higher priority account with your Supplier </li></ul></ul><ul><ul><li>Gain other concessions on shipping, payment terms, etc. </li></ul></ul>3. Renegotiate Everything
  12. 12. <ul><li>Look at your current facility and the rent you’re paying </li></ul><ul><ul><li>Look around. Bigger, nicer facilities may have come on the market. Some at the same or lower rent than you’re paying. </li></ul></ul><ul><ul><li>Knowing this, go back to your landlord and try to get a better deal, so that you don’t look to leave your current facility. </li></ul></ul>3. Renegotiate Everything
  13. 13. <ul><li>Leave no stone unturned, get new quotes on your </li></ul><ul><ul><li>Health Insurance </li></ul></ul><ul><ul><li>Telephone Service </li></ul></ul><ul><ul><li>Internet Service & Hosting </li></ul></ul><ul><ul><li>Marketing Programs </li></ul></ul><ul><ul><li>Office Supplies </li></ul></ul><ul><ul><li>Etc. </li></ul></ul>3. Renegotiate Everything
  14. 14. When times are good, you tend to hold on to “marginal players” that may be friends, family or other. Their business skills are probably no longer in line with the needs of the position and the Company. You can only afford to employ people that are committed to giving 150% to get the job done. You need to be “Lean and Mean” 4. Re-evaluate Your Staff
  15. 15. <ul><li>When times are good, you tend to generous with the benefits you offer your Employees. </li></ul><ul><li>Now is the time to look at </li></ul><ul><ul><li>Unnecessary Travel & Entertainment </li></ul></ul><ul><ul><li>Minimally productive Association Memberships or Trade Shows </li></ul></ul><ul><ul><li>Use of Company Assets </li></ul></ul><ul><ul><li>Company participation in Health Care Benefits funding </li></ul></ul><ul><ul><li>401k Matching </li></ul></ul>5. Re-evaluate Your Benefits Package
  16. 16. <ul><li>During the slow time, get your Employees working on some lower priority projects… </li></ul><ul><li>Build Teamwork & Ownership </li></ul><ul><ul><li>Painting </li></ul></ul><ul><ul><li>Equipment Maintenance </li></ul></ul><ul><ul><li>Moving/Building Offices </li></ul></ul><ul><ul><li>Clean-up the Warehouse </li></ul></ul><ul><li>And don’t spare the pizza! </li></ul>6. Implement “Low Priority” Work list
  17. 17. <ul><li>You never want your Customers to think that </li></ul><ul><ul><li>Your Company’s in trouble </li></ul></ul><ul><ul><li>You can’t service their account </li></ul></ul><ul><li>Communicate with them often about </li></ul><ul><ul><li>Special promotions </li></ul></ul><ul><ul><li>New Products </li></ul></ul><ul><ul><li>Possible collaborative projects </li></ul></ul><ul><ul><li>New ways to help them </li></ul></ul>7. Over-communicate with your Customers
  18. 18. <ul><li>Ready to “Hit the Ground Running”? </li></ul><ul><li>Now, when things are slow, is the time to work on your Business Plan </li></ul><ul><ul><li>Get your key personnel involved </li></ul></ul><ul><ul><li>Develop the correct Strategy </li></ul></ul><ul><ul><li>Put together the necessary Action Plans, along with details, dates and responsibilities </li></ul></ul><ul><ul><li>Run a draft past your Banker </li></ul></ul>8. Work on your Business Plan
  19. 19. <ul><li>Businesses cut Advertising first </li></ul><ul><li>Seize this opportunity to capture “Top of the Mind” awareness with your customer group. Use </li></ul><ul><ul><li>Flyers </li></ul></ul><ul><ul><li>E-mail Blasts </li></ul></ul><ul><ul><li>Social Networks </li></ul></ul><ul><ul><li>Articles in local papers or journals </li></ul></ul><ul><ul><li>Cover all networking events </li></ul></ul><ul><ul><li>Sales “Cold Calls” </li></ul></ul>9. Continue to Advertise/Communicate
  20. 20. <ul><li>Bankers do not like Surprises </li></ul><ul><li>Bankers would be more likely to extend payments or modify terms, if </li></ul><ul><ul><li>You keep them abreast of your current business situation </li></ul></ul><ul><ul><li>You share the performance you are expecting </li></ul></ul><ul><ul><li>You share the progress you are making </li></ul></ul><ul><ul><li>You make them feel confident </li></ul></ul>10. Over-Communicate with Your Banker
  21. 21. Customers don’t think “referrals” It’s not that they don’t care, they just don’t think about it. Make a habit of asking your good customers if they have any colleagues or friends who own businesses that could use your product or service. Once asked, they really will try. 11. Ask Your Customers for Referrals
  22. 22. <ul><li>There are bound to be other geographies or customer segments that can use your product or service, but currently don’t. </li></ul><ul><li>Identify markets to attack </li></ul><ul><li>Do a special mailing, phone barrage, targeted “Cold Calls” to test the level of interest </li></ul><ul><li>See what you learn, modify your target and/or approach, and try it again </li></ul>12. Look for New Markets for Your Products
  23. 23. <ul><li>There are other uses for your product that you may not know. Look to other geographies and markets segments here also. </li></ul><ul><li>Can your product be used outdoors as well as indoors? </li></ul><ul><li>Can you access it on-line? </li></ul><ul><li>Can it be a component or a larger product </li></ul><ul><li>Can your product be used overseas? </li></ul>13. Look for New Uses for Your Products
  24. 24. You know that some customers generate most of the sales, but are they generating more than their share of costs? Are you really making money on your high volume product lines? Are some of your products actually costing you money to sell them? Now is the time to dig into the numbers with your accountant and answer those questions. 14. Dig Deeper into your Profit Model
  25. 25. You have already re-evaluated your workforce. However, you may still have some people that could be moved to part time or from part time to termination. If you can move someone to part time, do it immediately. If you have a part timer whose work can be redistributed to others, make the change and share some of the salary savings with the those left. 15. Eliminate Unnecessary Positions
  26. 26. <ul><li>There are other companies out there who supply complementary products and services to your customers to fill their needs. </li></ul><ul><li>Market jointly with those other companies to </li></ul><ul><ul><li>Offer a “One Stop Shop” </li></ul></ul><ul><ul><li>Expand everyone’s customer base </li></ul></ul><ul><ul><li>Get more bang for your promotional dollars </li></ul></ul>16. Look for ways to “Joint Market”
  27. 27. <ul><li>You’ve had your nose to the grindstone for so long, you probably haven’t given much thought to the assumptions you built into your business model. Are they still valid? </li></ul><ul><li>Ask colleagues to challenge them </li></ul><ul><ul><li>Your Banker </li></ul></ul><ul><ul><li>Your Key Employees </li></ul></ul><ul><ul><li>Business Associates </li></ul></ul><ul><ul><li>Family Members </li></ul></ul>17. Challenge Your Business Assumptions
  28. 28. <ul><li>If you can find the time, take this opportunity to get some needed training for your Employees. </li></ul><ul><li>Some will cost, other will be free </li></ul><ul><ul><li>Industry on-line training </li></ul></ul><ul><ul><li>Local Community Colleges </li></ul></ul><ul><ul><li>Chambers of Commerce </li></ul></ul><ul><ul><li>Trade Show seminars </li></ul></ul>18. Train Your Employees
  29. 29. <ul><li>Everyone is cutting costs their own way. Many are cutting headcount. </li></ul><ul><li>That could be an opportunity to pick up some good talent and upgrade your staff. </li></ul><ul><li>What are the benefits? </li></ul><ul><ul><li>They’re glad to have a job </li></ul></ul><ul><ul><li>They want to prove their worth </li></ul></ul><ul><ul><li>They have superior capabilities </li></ul></ul><ul><ul><li>They may come for less money </li></ul></ul>19. Pick-up Available Good Talent
  30. 30. <ul><li>“ It is your Attitude, not your Aptitude, that determines your Altitude” - Zig Ziglar </li></ul><ul><li>If you have a plan for where to take the business in the long and short term, you can be confident and show it. </li></ul><ul><li>Maintain a positive attitude, that will be noticeable and reassuring to </li></ul><ul><ul><ul><li>Your Employees </li></ul></ul></ul><ul><ul><ul><li>Your Customers </li></ul></ul></ul><ul><ul><ul><li>Your Suppliers </li></ul></ul></ul><ul><ul><ul><li>Your Lenders </li></ul></ul></ul>20. Maintain a Positive Attitude
  31. 31. You may not have the time or capability to implement all of these actions. But, try the ones that may have the “Biggest Bang for the Buck” for you and your Company. Doing nothing is not an option!
  32. 32. “ It’s not whether you get knocked down, it’s whether you get up” - Vince Lombardi
  33. 33. Questions?

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