Recession Proof Your Business
- Diversify the products and services you offer with the intention of creating additional sources of cash flow. The object is to create multiple unrelated revenue streams.
- Create a detailed budget for planning purposes. This is a prerequisite to reducing expenses.
- Reduce inventory levels to the extent possible in order to reduce interest expense.
- Consider establishing direct barter relationships or joining a barter exchange in order to conserve cash. Items most commonly bartered include accounting and tax services, legal services, advertising, office space, office supplies, security services, and postal boxes.
- Re-evaluate your credit granting policy in order to minimize credit losses and late payments. Hire a good collection company if necessary.
- Renegotiate vendor agreements asking for lower prices and longer payment terms.
- Reduce debt to the extent possible. Don't buy using credit to the extent possible. Credit card debt is extremely expensive.
- If you will need financing, be certain to arrange it before you really need it.
- Focus on customer/client retention. It is far more expensive to obtain a new client than to retain existing clients by providing excellent service.
- Consider bringing in an investor who can assist in bringing in new customers/clients and sharing any financial burden. Sometimes owning a smaller percentage of a more profitable business is a wise decision.
- Consider a merger for the same reasons as #10 above.
- If possible, sublease some of your space and/or consider a virtual office as an alternative. Rent is usually one of the largest expenses for most businesses. Renting desks to small business owners can often save big dollars.
- Reduce your advertising costs by maximizing the use of low cost promotional advertising products.
- Focusing on priorities as opposed to long-term projects or goals.
- Evaluate all insurance policies for adequacy and cost. Contact an independent business broker for competitive bids.