Will your business thrive during the tough times?
Economy is cyclic in nature, and all business activity is perpetually swinging from recession to recovery and vice versa. Many businesses close down or go bankrupt if caught unprepared by the economic downturn. To ensure your business longevity, it’s extremely important to be proactive and prepare way ahead of the crisis times.
This article outlines a few things that you NEED to be thinking about in case tough economic times are ahead, and how SBDC can help you in this.
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For a quick express-test of how healthy your business is, go through these 5 sections.
Is your business prepared to solve a cash crisis?
- Successful companies focus on growth during economic downturns instead of cutting costs. Organizing your financial data so that it is in one place is crucial. Set your priorities for collections and payables. Each night determine your next day’s tasks and set a time frame and goals for cash management.
Controlling your finances and reviewing your costs
- Having a pulse on your finances will allow you to focus on the important aspects of managing your business. Prioritize who to pay first. Complete a cash flow forecast before setting a payment plan, bill customers as soon as possible, learn how to create effective financial statements. Don’t forget to forecast short-term cash flows. While many businesses neglect this exercise, it can be one of the most important activities a small business can engage in to avoid disaster.
How to improve efficiencies
- Review inventory levels, liquidate everything that has been on the shelves for over 90 days, sell outdated items at cost, if necessary, re-stock shelves with faster-selling items and buy using “Just in Time” ordering processes, if possible. Consider electronic automation of processes such as inventory tracking, POS transactions, scheduling, manpower planning, etc.. Improving efficiencies will allow you to have more clarity, confidence, and productivity on a day to day basis.
Low-cost marketing programs
- Do you have a strategy in place to implement low-cost marketing programs to continue to market your business to stay profitable in the interim? Low-cost marketing programs can still target the right client who may be seeking your services, the marketing strategy may need to be re-evaluated. Carefully invested marketing dollars and active business promotion will only generate more sales. Make sure to re-define the core target market and think about a “niche focus”. Continue to connect with current and past customers.
- Thank them for their business, suggestive sell another product or service produced by your company, implement a referral process and re-package services to accommodate smaller clients and reduced budgets. Continue to find the “hook” that will trigger a response from customers and potential customers. Always include a “call to action” in your communications.
Business relationships
- An effective business owner during an economic downturn will continue to refine his/her business skills, attend workshops in subject areas where support is needed, will invest in time-solving problems. Communication is imperative! Talking to customers and employees on a regular basis is important. And, networking with other business owners will help you share ideas on how to continue to navigate through uncertain times. Consider any opportunities for collaboration with other businesses in your area.
Contact an SBDC consultant to help guide you through the process at no charge. Attend one of the SBDC’s low-cost trainings and learn more about how to focus on the growth of your business during a potential economic downturn.
Click below to set up a confidential, no-cost meeting with one of our expert consultants.
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Who We Serve
Idaho SBDC assistance is available to anyone interested in expanding or starting a private small business in Idaho. Consulting is available at no cost to you. Approximately 98% of all firms in Idaho qualify as small businesses and, therefore, are eligible for assistance from the nearest Idaho SBDC office.
