Economy crashes are unavoidable and they aren’t the only form of catastrophe that can affect your business. It is necessary to be informed and competent about how to better succeed and prosper under such circumstances. We spoke with Andrew Miller, former CEO of Polycom, Inc., on how to be prepared to withstand any economic climate.
Monitor Cash Flow and Inventory
Track the sales and available inventory through times of economic declines. Although revenues are more likely to decrease, while the cash flow is tied up, you do not want to get bogged down by a huge volume of inventory. Focusing on prompt, correct, and appropriate financial statements will allow you to better forecast your status months in advance.
Eliminate Non-Essential Expenses
It will make a huge impact down the road by removing costs that are good to have but not vitally important. It is also likely that you are overspending in a certain area of your business that may not be producing as large of results if the money is spent elsewhere. For starters, just because you’ve always purchased a certain product or utilized a certain vendor doesn’t mean that there is not a cheaper option elsewhere. A little bit of research may allow you to continue producing the same results for a lesser cost.
Don’t Skimp
While your first impulse is to save money during an economic crisis, this is not entirely the best practice for every component within your business. You can have an advantage on your rivals by adding a salesperson or an extra service to your market. In addition, looking for employees to perform this additional task usually isn’t hard to find in times like this due to layoffs or cutbacks within other companies.
Increase Your Ad Budget
It is not unusual to see other firms cut their advertisements or promotions through a recession. This gives your business a fantastic chance to sustain or boost your advertisement, which will attract and hold a greater market share. Miller also recommends offering something more or different from what your competitor is doing to persuade their clients to become your clients.
Networking
Business is all about communicating and connecting with individuals. During an economic crisis, networking gives you the chances to see how other businesses are coping while also allowing you to find new markets, meet new clients, and gain fresh skills and ideas at little to no cost to your business. Don’t ignore the ability to develop and maintain the established personal professional networks while creating new ones as well.
Withstanding the Storm
It is easy to worry about your business in an economic crisis, but adopting these tips will help ensure that your business avoids rough times and maybe even gains from them. It all starts with studying how your company is currently operating and discovering new opportunities to adapt and thrive in an unpredictable time.
