Tips from entrepreneurs and senior executives in planning and managing their personal and business finances.
TIP #1: Plan Ahead
Any good ship captain will use the “calm before the storm” as an opportunity to prepare the ship for rough seas. Business owners should do the same. Take the time now to think about your business’ potential vulnerabilities. What are the three most serious challenges facing the business? What events or circumstances could cause trouble in the future? What resources (financial or otherwise) could the business access if it needed to? These basic questions can start you thinking about what you need to do should your business encounter difficult times in the months ahead.
TIP #2: Strengthen Relationships With Key Clients
When the going gets tough, good clients are worth their weight in gold. When clouds are gathering on the horizon, the best business owners take the time to strengthen relationships with top clients. That can take any number of forms: Sitting down and talking about their ongoing needs, getting feedback on your service and products, or even a “thank-you” lunch. The point is to make it clear to key clients that you appreciate their business, and look forward to a strong, mutually beneficial-relationship in the future.
TIP #3: Consult With Peers
As the saying goes, experience is the best teacher there is. Which is why the best business owners take the time to learn from the experience of others. Ask the owners you know in your community about how they've dealt with previous downturns. What lessons have they learned? Don't limit your discussions to people from the industry you operate, often the most creative ideas come from owners whose businesses are completely different from your own.
TIP #4: Seize Marketing Opportunities
Marketing and sales are usually the first two budget items to get trimmed when a slowdown hits. Savvy business owners know this, and use it to their advantage. Instead of slashing their marketing budgets in a downturn, they use the opportunity to expand their marketing to key prospects. After all, with less competition for customer attention, a well-crafted marketing message has a greater chance to stick in the customer’s mind.
TIP #5: Explore Financing Options
The bank isn't the only place to go for business financing. During a slowdown, it may make sense to explore other options such as taking on a equity or quasi-equity partner, or financing “depreciated” assets, or structuring a sales lease-back. Understanding how your business can utilize such strategies can make a world of difference in tough times.
TIP #6: Build Your Team
When sales drop and revenue dries up, it’s often necessary to trim staff. The best businesses see this as an opportunity to weed out mediocre team members and to refocus their development and mentorship efforts on a core group of top performers. Nurture your rising stars, and determine what responsibilities they can take on now to build their knowledge and experience. Figure out which team members are doing what, and figure out how you can help them spend more time doing what they do best. That way, your business will have an excellent team in place to capture new opportunities when the economy turns around.
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