13 Steps to Make Your Business Recession-Proof
Given what’s happening in the catalog world these days, many of you must be thinking about what can be done to help make your business “recession-proof.” While hoping for the best (i.e., a short, mild recession), plan for the worst (a long, deep recession).
Consider taking the following steps to help recession-proof your business:
1. Freeze hiring. Don’t replace vacated staffers, and focus on employee productivity. Your employees know times are tough and are ready, willing and able to do more. Just ask them to.
2. BUT, avoid layoffs. Your staffers won’t mind taking on more work if they’re assured job security.
3. Hold off on major capital expenditures.
4. Collect payments efficiently. Now is the time to stay on top of your accounts receivables. Cash is king, so be prepared to offer discounts for complete payment if necessary.
5. Stretch out payments to suppliers. Ideally, this can be done with their permission through negotiations.
6. Keep inventory levels low, and preserve your cash. This is particularly true if you have short, domestic-based delivery times.
7. Sell to existing customers. Stay close to the 20 percent of your customers who account for 80 percent of your revenue with regular phone contacts and special offers. Don’t take their loyalty for granted, or risk letting them be scooped up by the competition.
8. Continue mailing, no matter what you do. If you need to reduce costs, look at lower-cost mail pieces for your online buyers.
9. Focus on the basics. Forget the exploratory projects for the moment, and focus on the handful of projects that’ll make a difference in the short term. Is it shortsighted? Maybe, but survival is shortsighted.
10. Ask your vendors for help. Check on the availability of longer payment terms, larger discounts, more product support, customer financing programs, training or anything else your vendors can do for you.