Surviving a Recession
A recession, depression or any other down turn in business requires a leader to look introspectively at their business and determine the best way to move forward. Sometimes, a business simply cannot make it through tough times. Most, however, can survive. And with hard work and a well thought-out strategy, most will emerge stronger.
First, restructure immediately to meet the demands that exist today – not under your old business model. Take a good hard look at everything in your business and shed the items that are not completely necessary. In household budgets, families talk in terms of food, water and shelter to survive. Take care of those items first and lose everything else. The same is true in business. Don’t wait to see what happens tomorrow because tomorrow is too late. Start making changes and restructure your business model now. Scour your financial data and determine what vendors you can cut and which ones might offer you a discount to keep your business. A full day examination at your financials will reveal expenses that you had long forgotten about and may not be necessary anymore.
Second, bring all of you leaders together and develop a single action plan for all departments. The plan must set achievable goals and a realistic timeline for completion. Force all of your people to acknowledge hurdles and develop a plan to overcome all of the hurdles. Every department should find expenses that can be cut. Trimming expenses is the easiest way to increase your net profit or shrink your loss.
Third, own all of your processes. As a leader you have to be the single person in charge and delegate to your people. Keep your managers accountable and ensure that they stay on target with the timeline of progress. Hold daily or weekly updates to measure accomplishments. Don’t let anyone off the hook. The other managers are watching how everyone is kept on task. A single forgiving moment can allow chaos in the process.
Identify the key players. Every organization has key employees of every pay grade. Every organization also has a host of unproductive employees that take but don’t give back. Shed the employees who don’t help you or who hurt morale with negativity. Watch your key employees because every competitor is coming after your most productive employees.
Consistently communicate with employees. Employees smell fear and market conditions make all personnel afraid of losing their job. As a leader it is your responsibility to remind employee that while times are tough their jobs are secure. Ask them for input on cost saving measures and they, in turn, will own the process of a turn-around with you. Don’t lie to the employees. Be honest and they will respect you for that and help you emerge as a stronger company.
Communicate with customers. Customer service and customer retention become primary goals. Get out and meet with your customers and assure them that you can still provide the same high quality product and service. Remain enthusiastic and optimistic in front of all of your customers. Be honest but positive. Don’t give your customers a reason to buy elsewhere. Poor quality and bad customer service is the only excuse a customer needs to move their business to the guy down the street.
Don’t lose sight of the original vision that the company had when it started. Continue to set sales goals and mandate that your employees meet them. Goals may have to be scaled back but they should still be met.
Work every day. Entrepreneurs have no days off.
A recession, depression or any other down turn in business requires a leader to look introspectively at their business and determine the best way to move forward. Sometimes, a business simply cannot make it through tough times. Most, however, can survive. And with hard work and a well thought-out strategy, most will emerge stronger.
First, restructure immediately to meet the demands that exist today – not under your old business model. Take a good hard look at everything in your business and shed the items that are not completely necessary. In household budgets, families talk in terms of food, water and shelter to survive. Take care of those items first and lose everything else. The same is true in business. Don’t wait to see what happens tomorrow because tomorrow is too late. Start making changes and restructure your business model now. Scour your financial data and determine what vendors you can cut and which ones might offer you a discount to keep your business. A full day examination at your financials will reveal expenses that you had long forgotten about and may not be necessary anymore.
Second, bring all of you leaders together and develop a single action plan for all departments. The plan must set achievable goals and a realistic timeline for completion. Force all of your people to acknowledge hurdles and develop a plan to overcome all of the hurdles. Every department should find expenses that can be cut. Trimming expenses is the easiest way to increase your net profit or shrink your loss.
Third, own all of your processes. As a leader you have to be the single person in charge and delegate to your people. Keep your managers accountable and ensure that they stay on target with the timeline of progress. Hold daily or weekly updates to measure accomplishments. Don’t let anyone off the hook. The other managers are watching how everyone is kept on task. A single forgiving moment can allow chaos in the process.
Identify the key players. Every organization has key employees of every pay grade. Every organization also has a host of unproductive employees that take but don’t give back. Shed the employees who don’t help you or who hurt morale with negativity. Watch your key employees because every competitor is coming after your most productive employees.
Consistently communicate with employees. Employees smell fear and market conditions make all personnel afraid of losing their job. As a leader it is your responsibility to remind employee that while times are tough their jobs are secure. Ask them for input on cost saving measures and they, in turn, will own the process of a turn-around with you. Don’t lie to the employees. Be honest and they will respect you for that and help you emerge as a stronger company.
Communicate with customers. Customer service and customer retention become primary goals. Get out and meet with your customers and assure them that you can still provide the same high quality product and service. Remain enthusiastic and optimistic in front of all of your customers. Be honest but positive. Don’t give your customers a reason to buy elsewhere. Poor quality and bad customer service is the only excuse a customer needs to move their business to the guy down the street.
Don’t lose sight of the original vision that the company had when it started. Continue to set sales goals and mandate that your employees meet them. Goals may have to be scaled back but they should still be met.
Work every day. Entrepreneurs have no days off.
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