Business Survival in Tough Economic Timespan Requires Optimism, Pragmatism, Smarts
CONTACT:
CHRIS RUYS COMMUNICATIONS, INC.
Chris Ruys (312) 337-7746, chris@chrisruys.com
FOR IMMEDIATE RELEASE
January 2009
It’s been said that “A rising tide lifts all boats.” But how do we lift our boats when the economic tide is going against us?
That’s the quandary many women business owners face in these tough economic times. The topic was explored at a recent Women’s Business Development Center (WBDC)-sponsored, three-hour seminar at the University of Chicago Gleacher Center titled “Surviving in a Challenging Economy: the Economy’s Impact on Small Business” before a capacity audience of 100 women business owners.
A panel discussion chock full of useful tips ensued. Moderated by Emilia DiMenco, executive vice president of business banking at Harris Bank, the panel included eight experts including turnaround specialists, restructuring consultants and a bankruptcy lawyer. Here is some of their best advice.
Take a rigorous look at the health of your business. Review all functions from the bottom up to determine where you can tighten your belt. Do it right now, don’t wait until tomorrow. Review every line item on your budget, and determine where you can cut without impacting your ability to properly service customers and generate revenue. Make sure you know your cash flow projections: without that knowledge, you can get into financial trouble quickly. Ask yourself the steps you need to take in order to protect your business until the down cycle turns around.
Manage your expenses carefully. If you’re considering an expense that isn’t really important to your core business, don’t make the purchase. Buy very strategically and test with small quantities until the item is a proven seller. Get rid of slow-moving inventory, and keep only the best-sellers in stock.
Start a PIT (Problem Identity Team). To help the business grow and survive, start a Problem Identity Team. Even if it’s only three people, ask your staff to contribute ideas for helping the business. Meet an hour a week for three weeks, and you’ll probably have 50 to 150 ways to improve your company. From that list, select 20 problems that you can attack right now and – attack!
Work more aggressively to collect the money owed you. Consider the cash flow statement your best friend. It tells you what you need to know, not what you want to hear. Be proactive about collecting receivables. Know what payment cycle they’re on, and have someone get in front of the check-cutting cycle. Have someone other than the person who sells your product or service make the collection calls.
Negotiate with your landlord and vendors on payment terms. First, try to renegotiate your lease and your terms. They are as worried as you are. If you’re on fixed rent, try to negotiate a percentage rent during the downturn, or consider downsizing and/or sharing your existing space. Negotiate longer payment terms with vendors, and talk to them about joint promotions that can benefit both of you.
Cash is king: conserve it and build it. If there’s old inventory, convert it to cash. Consider taking products on consignment so that no payment is due until the item is sold. If you are experiencing a cash crunch, you probably already know that the banks have tightened up their lending policies. Instead, seek capital from family and friends, preferably as equity rather than a loan. Try not to use credit cards: they can make a bad situation even worse. If you should have to close your business, you’ll be stuck with credit card debt on top of everything else. The Women’s Business Development Center is now offering a tested workshop on borrowing from family and friends. For further information, visit their web site at
www.wbdc.org.
Offer great customer service. Make sure you’re offering the best service possible. Stay in touch with your customers. Train retail sales staff on “suggestion selling” so they can suggest at least five items that “go with” every item in the store for up-selling. Consider diversifying and offering new services. Resist price discounts: instead offer additional services and/or products. Don’t overlook your competition: check out what they’re doing and learn from them.
Market your business aggressively. Now is not the time to pull back on marketing and publicity. Raise your visibility. Re-establish relationships and keep connected. Spruce up your web site. Mail and email press releases about new services, new products or events. Connect and network with trade and industry organizations. Now is the time to network constructively.
Get help from your accountant, attorney and other resources. If you can’t save the business, ask yourself what steps you can take to curtail your losses. Your accountant and attorney and possibly other professionals can be helpful at this point, so reach out to them – fast. Face the problem today and act now!
There will be no escaping the pain. Most businesses will feel the pinch. But with some savvy moves – right now – you can minimize your losses, stabilize or even increase your revenues, and be better prepared for the turnaround when it comes (and it WILL come).
For further information about the Women’s Business Development Center and its workshops and services, visit their website at www.wbdc.org, or contact them at 8 S. Michigan, Suite 400, Chicago, Illinois 60603.
# # #
