Featured Article – 2010 March
Tips for a Tight Economy
Run a tight ship. Control expenses. Increase collections. Put off all discretionary expenditures.
Renegotiate deals with suppliers. If you can arrange for a lower cost on goods or extend your payment terms, you’ll have less need to borrow, and you’ll be able to increase your profit margins.
Take stock of all new clients. Prepare an application that asks for the legal and DBA names of the business, the client’s bank, names of the principals (if it’s a corporation or partnership), address, phone number and website, and the business tax ID number. Having this information helps with collection efforts.
Move ahead on contingency and scenario planning. With your team, make a list of the five worst things that could happen to your company in the next 12 months. Look at it from both macro and micro levels. Have plans of action to cover every item on the list.
Don’t lower prices, add value. Lowering your price tends to hurt your brand and makes it difficult to raise prices later. Instead, create a new value proposition that makes your prices appear lower. Recognize that consumers are spending less. Make it appealing for them to spend some of their money on your product or service.
Make use of your peers. Talk to or meet with other business owners in your industry. Share fresh ideas and new perspectives.
Keep your best talent. Make sure your key players are fully informed. Get everyone on the team involved and focused.