It has often been said that running a business during tough times gives you, the business owner a crutch to explain lots of mistakes. It is easy to explain your own mistakes and missteps by blaming a faceless economy – after all, the media gave us permission. Given enough time and energy, an entrepreneur can explain away and justify every decision he or she has ever made – good and bad alike.
Just say no! Don’t do it. Take responsibility for your own actions, dig deep and use the creativity, drive, and energy you used to start your business in the first place. In addition, here are some tips on how to manage your business effectively during a downturn.
Dig into your expenses – evaluate every part of your operation ask these simple questions.
- Is this expense necessary to my operation?
- Can I get this done cheaper?
- Can I negotiate a lower price?
Evaluate and assess your payroll.
- There is always room to trim payroll costs – remember your job is to run the business not be your employee’s best friend. Oftentimes we think we are protecting our staff by not letting them feel the pain, but if action is not taken we are actually putting their positions and salaries at greater risk.
- Can you contract out – certain technical positions or projects.
- Trade up with regard to employees.
- This is a great time for talent development – finding good, strong candidates during a down economy is easy and it has the potential to drive revenue to your business.
- Benchmark your business against itself – use sales per employee hour to manage staffing levels during falling or stagnant sales.
- Benchmark your business against others in the industry – reach out to others – people you know and trust and have honest discussions about how you can weather the storm.
Assess the marketplace.
- This is the time when struggling businesses fall apart. It’s a hard but realistic look at the natural progression capitalism – only the strongest survive.
Negotiate with your vendors.
- Now is the time to ask for discounts in exchange for your business.
Market your business in a different way.
- We are in the middle of a dramatic change in the way society functions in an electronic world – now is the time to embrace social media, Internet sales, and reaching your customer in a new and exciting way.