Cash is the vital factor required for a business to run smoothly. Make sure your lines of credit are adequate, and pay extra attention to cash-flow projections. If you run short of working capital, manage by cash. Monitor your numbers closely, and be ready to act.
Strengths and weaknesses:
You must know yourself, your weakness and strength both. If you are aware of problems in any areas of your business, solve them now. They make you weak. Similarly, find new ways to capitalize on your strengths.
Identify your most profitable products or services, and focus your sales efforts accordingly. Use gross profit as a measure, or better yet, your gross margin return on investment.
Determine who’s profitable, and who’s not. If some customers are a drain on resources, either raise their prices or “fire” them. You can’t afford to carry unprofitable customers along; you need to work lean and mean right now.
Ramp up marketing efforts:
Usually most of the firms decrease their investment in marketing. The exact worst thing: cut back on marketing. Research proves that companies that maintain marketing activity during soft economies reap greater benefits later. Besides, marketing firms are hungry for business now, so you can negotiate better deals.
Review your compensation:
Try to get the most from you employees. If you haven’t already, put performance measurements in place and link compensation to performance. Think creatively: Lower base salaries and increase incentives and bonus on performance.
Target your competitors’ customers:
If one of your competitors is struggling, reach out to its known customers. If those customers sense a decline in quality or fear a service disruption, they may be receptive to your pitch. If you’re in a position to buy out floundering competitors, consider it, but only if it will further your own strategic goals.
Keep your eyes open:
Be on the lookout for fresh ideas and opportunities. Stay abreast of news and trends. Interact with other entrepreneurs to see what they’re doing. Learn from what’s going on around you, and be poised to jump on opportunities when they come your way.