How to survive recession

Discussion in 'Articles & Tutorials' started by diagurzula, Jun 12, 2010.

  1. diagurzula

    diagurzula
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    1. Use the minimal crew; reduce staff for long term growth and survival.

    2. Cut establishment costs. Recycle and recharge equipment and push for alternate and
    viable substitutes.

    3. Use joint advertising, letting out office spaces and use DIY maintenance for repair.

    4. Demote your business model to a low cost one. Adapt to the prevailing conditions.

    5. Cut establishment costs. Recharge and recycle equipment, and push suppliers for viable and alternate materials.
     
  2. abdjiel78

    abdjiel78
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    1. Shift some of your marketing budget to sales. You’ve planted the fields; now pay the harvesters to go to work.
    2. Hire some key people from competitors in your industry. Increase your strength and get good PR for doing it.
    3. Buy capital equipment now (or soon), when it’s off-cycle, suppliers are desperate, lines are short, and customers like you are welcome. When the up-cycle returns, you’re set to cash in, while others pay high prices and wait in lines with the other unfaithful.
    4. Set a new metric; be in the slower half to lay off people. Not as wishful thinking, but as a conscious strategy to invest in people, and to be seen as and known for doing so. Did you believe that stuff about people you said? Now's the time to walk the talk.
    5. Higher levels of management—take a pay cut. Not just bonuses, either. The higher the level, the deeper the cut. What part of “leadership” didn’t you understand?
    6. Tell your shareholders to suck it up. Not all stakeholders benefit equally at all times. This is not their time. Their time will come again, and even better—if they have the foresight to help customers, suppliers and employees when it is they who need the help.
    7. Ask your key customers what you can do for them. They know you’re short on cash; offer services, advice, free consulting, and non-cash expenditures.
    8. Tell your key customers that you’re extending your receivables terms by 15 days—because you understand how things are. Do not stiff your suppliers. And don't hide these two particular lights under a bushel; tell customers and suppliers personally what you're doing, and let them thank you. Personally.
     
  3. Bharat Book

    Bharat Book
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    The secret to surviving a recession is opportunity recognition. The first step in opportunity recognition is to know and believe that there will always be opportunity for those who seek and pursue it. Regardless of how bad the economy may seem, people still buy and sell. People still have needs to fill and businesses have products and services that meet those needs.
    To survive in recession First, you embrace a mindset that relentlessly pursues new opportunity. Don’t close yourself off to new ideas and change and become an expert on what people need and want. In a recession, people may want some things that are different and someone will have to fill those needs. Second, read lots of books, magazines and other publications that may expose new needs your product or service might be able to meet. You will probably discover that people still want your product or service, but just need to see it differently.
     
  4. MarkTaylor

    MarkTaylor
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    Tips for weathering a recession...

    Hi Everyone,

    Thanks to diagurzula for setting up this thread - it's full of good ideas... It prompted me to dig out an article I wrote in 2009 on this very subject. I wonder how well (or badly) it stands up three years later...


    Ten Tips for Weathering the (Looming) Recession

    With the threat of recession looming (or even upon us?), many businesses are asking themselves how they can survive in the face of declining customer spend, tighter credit periods and the general doom and gloom that comes with an economic downturn.

    Naturally, the answer will depend on your business model, B2B, B2C, and so on. But, in principle, for the entrepreneur, the 'cash last' approach should always be the first priority, either in a start up situation or for a growing business.

    The following are my tried and tested methods for tightening the company belt:
    1. Sweat your assets! Only replace hardware when you absolutely need to. Even if items are fully depreciated, as long as they function, keep them.

    2. Keep stock moving. Even if you have to cut price, the worst thing you can do is let stock become obsolete.

    3. Talk to creditors and free up cashflow. Arranging or extending credit can free up a lot of cash and this can help with…

    4. Tactical, below the line marketing. Despite recessionary concerns, keep up your marketing activity. Simple, price-based offers on cheap leaflets distributed locally or other cost-effective methods are often adequate for keeping you on your customers’ radar. Businesses still need to spend and consumers still need to buy - sometimes as a tonic to help deal with the recession.

    5. Build up a cash reserve. Arrange short-term finance options early. The last thing you want is to run out of cash so put facilities in place from a range of affordable sources - even if they are a little dearer than longer-term debt, better to have the option than to go 'cap in hand to the bank'.

    6. Work on a skeleton crew. If necessary, look to reduce staff hours to those that are core to your business. It may be unpopular but hopefully some of your staff will see it as a short-term measure to ensure longer-term survival and growth.

    7. Look to reduce general establishment costs: Use recharged print cartridges, reduce call charges using SKYPE, shop around for cheaper substitutes on key materials - don't be afraid to push your suppliers.

    8. Restructure longer-term debt if necessary: lenders are generally happy as long as debt is being serviced and if you’re talking to them, they are reassured of your professional approach to management. A little restructuring is always an option to free up some cash.

    9. Where possible, defray overheads. Let out spare office capacity to other businesses, consider joint advertising with partner businesses, share key services and use DIY alternatives for repair and maintenance issues.

    10. Longer term, look to move your business model to a lower cost base. By analysing the key costs of the business and the revenue they generate, it is possible to rationalise and focus on core business. Even if it is painful to cut some things out, business is about adapting to the prevailing conditions.

    Some of these expedients require you to make some difficult decisions, but it is a route to survival. Ultimately, a leaner, fitter business will emerge, all the more competitive for having weathered the storm. Your only question will be ‘why didn’t I do these things sooner?’
     
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  5. MICHAEL LINDMARK

    MICHAEL LINDMARK
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    Reduce Your Expenses During a Recession:

    1. Evaluate Your Mortgage
    2. Refinance high interest credit cards
    3. Reduce Spending
     

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