Will Your Company Survive The Downturn?

Tips On How To Survive The Downturn

In any downturn:

the risk of sales decline increases
attraction of new customers is more difficult
margins are likely to drop as competition increases
employee uncertainty increases

But should this inhibit our growth plans?

After-all we often hear about success being a derivative of attitude. Most of the time we fight against our competitors for new customers anyway. It is just a little harder when the market tightens up.

Well, of course growth can be more difficult but almost all the companies we work with do not consider growth to significantly inhibited. They have one thing in common - a growth attitude.

However it is a little dangerous not to ensure your ship is in good order in stormy conditions so here are a few wise words to consider….

Build a more balanced portfolio

Our company continues to grow steadily during a tightening and increasingly competitive environment.    Part of our success is attitudinal but part is also due to acheiving a more balanced business portfolio.

Increase your customer base and your number of segments within your industry if you have an over-dependency.

Over dependency on one or two market segments or customers is a recipe for disaster (some companies we know generate over 20% of their revenue from one customer!).

But this is more of a longer-term solution when a downturn hits as it takes a long time to build extra market segments.

What can you do NOW to mitigate losses, remain competitive and retain staff?

Tight budgetary control is No.1 on our list. An expense reduction company that we know often claims it can reduce administration overheads by over 20%. Keeping costs tight means you can afford margin decreases.

Concentrate on better supplier deals. Negotiate hard and don't be shy about it because your suppliers will not want to lose your business in a tight environment.

You have the upper hand.

Resist increasing credit terms to your customers (i.e. opposite to the above!).

Increase your collection rate: There is no point in some one else having your money. Get on the phone and call your outstanding debtors and arrange a visit to pick up the cheque.

We are, in the end, in competition with our suppliers and customers for better control of the cash cycle.

Protect your markets

Protection strategies include:

Increase visit frequency to preserve relationships and discover any additional client needs. This is the easiest way to increase sales or at least maintain existing sales.

Maintain marketing efforts to keep getting your products and services to your existing client base. They are the ones that are more likely to re-order.

Try bundling products (or services) or offer packages and make it easy for your clients to order.

Retain Your Good Staff

Key to survival is retaining your good staff.

Non-financial ways to look after them include extra time off for family or birthdays. People love extra time off. They can do those extra things like take a long weekend to catch up with friends and extended family.

Include them in decision -making and try to get them to generate new ideas about how to deal with the slowing economy. Often they have harbored ideas about efficiency gains or improvements to working conditions which improve job satisfaction.

Join a Peer Group

Peer groups are becoming increasingly popular, helping leaders and managers devise better strategies and build productive working relationships particularly when times get tough.

According to our research, peer groups have high member retention rates and higher company sales growth rates due to practical creative idea generation and continued ongoing support by team members for the individual member.

Check out our peer group as an example for more information

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