Surviving An Economic Downturn

Planning with Budgets and Forecasting  Use budgets to review your expenditures  Use forecasts to look to see where you have the possibility of going  Planning draws the map from here to there  Benchmark your company against the industry averages Managing your cash flow Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 Evaluate all expenses by reviewing your Income Statement each month.  Review the services to see which ones are no longer needed, and research prices and offerings from different vendors to see if there are cost-effective alternatives.  Research prices through the web. Are there better alternatives? Managing your cash flow Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 Examples of operating costs ◦ Cost of goods or services sold ◦ Facilities (rent, cost of ownership) ◦ Payroll (including benefits, bonuses, etc) ◦ Contract labor ◦ Marketing and advertising ◦ Loan repayments ◦ Taxes (income, personal property, sales/use, payroll) ◦ Insurance Managing your cash flow Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

Pick 2! Quality Remember when comparing anything your business buys, you can’t have all three. You pick 2 and the vendor decides the Price third. Make sure that cutting costs does not lower the quality of your product or services. Service Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 Inventory Management ◦ Control ordering function and take physical counts ◦ Look at what sells and analyze re-order points ◦ Negotiate when trying new products ◦ Look at inventory turnover rate for your industry ◦ Get rid of slow moving inventory ◦ Require pre-payment for all specialty items ◦ Watch for restocking fees Managing your cash flow Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

Receivables must be monitored closely! Receivables can be an indicator of how hard your customers are being hit by an economic downturn, and could provide an early warning that clients are about to cut back on their purchasing. Managing your cash flow Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 Options when you need more cash ◦ Borrowing – from bank, family, shareholders  Use the right bank for your business! ◦ Additional Capital investment by owners ◦ ONLY A SHORT-TERM SOLUTION Managing your cash flow Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 Is using a credit card a good option for your business? ◦ Keep credit in your business name whenever possible. ◦ Get credit established when you DON’T need it.  Use discipline! Managing your cash flow Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

“… this man did not spend a dime if nine cents would do, but the great lesson he was teaching me was that you make money by creating sales, not by pinching pennies.” - Ken Blanchard & Sheldon Bowles Big Bucks! Revenue Saves the Day Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 Look at what you sell and how you sell it ◦ Does the “new economy” provide different uses for your product or service?  Don’t fall into the media trap – you are not a victim and the economy provides new opportunities if you will look at them.  Consider purchasing your competition or complimentary business  Expand services or Re-Invent Revenue Saves the Day Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 Look at your sales and marketing ◦ Passive Marketing ◦ Aggressive Marketing  How much does it cost to get a customer?  Enlist the help of a professional to learn how to sell or have someone sell for you. Revenue Saves the Day Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 Learn more about your competition ◦ Industry organizations ◦ Networking ◦ Have lunch with your competition ◦ Check out their websites for pricing, service, and sales ideas Revenue Saves the Day Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

“SmallBusiness Owners spend too much time working in their business and not enough time working on their business.” - Michael Gerber, The E-Myth Measure what you treasure Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 Why did you go into business?  Has your business changed directions since it started?  What has your experience been?  What did you expect? Have these expectations changed? Measure what you treasure Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 What can you do to improve your odds?  It is tougher now than ever for small businesses  Larger businesses operate differently and have better information for decision making  You need better information for decision making Measure what you treasure Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 If you work on your business, how do you know if it was a successful move unless you monitor your progress?  Bookkeeping and reports can create the X-ray but use your accountant to help read the x-ray. They can help you diagnose and put a treatment plan in place for your business. Measure what you treasure Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 What you need to measure your business Prompt and thoughtful answers to your business questions Monthly financial statements (balance sheet, income statement, sales analysis) with feedback and key performance indicators Reconciliation of your bank accounts Analysis of your business compared to your industry peers Measure what you treasure Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 What you need to measure your business (continued) Ideas for growing your business Proactive tax planning and preparation to save you taxes Accurate, easy and integrated payroll processing Required reports: payroll, sales tax, property taxes, income taxes, estimated payments Prompt resolution of any tax notices Measure what you treasure Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 If you do not have this information, you are working with one arm tied behind your back.  Consider your strengths and weaknesses  Do what you do best and outsource the rest.  Surround yourself with people who know the answers. Measure what you treasure Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

 Don’t get stuck in the day- to-day activities so that you don’t have time to implement any new ideas  Step back and look at your business from the outside to objectively see what needs to be improved to help it grow  Free yourself up to implement those new strategies Measure what you treasure Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA

Surviving An Economic Downturn

by Donna Bordeaux

Accessibility

Categories

Upload Details

Usage Rights

1 Embed 1

Statistics

Surviving An Economic Downturn Presentation Transcript