Making Preparations

On thestreet.com, in the small business section, there is an article entitled, “Five Ways Your Business Can Survive a Recession.” As with every piece of business advice lately, the article deals with the idea of shoring things up in order to weather the storm.

If you don’t feel like reading the whole article, here are the “Cliffs Notes”:

1. Get cash from your customers quicker and hang on to cash as long as possible.
2. Negotiate new rates on your credit lines (this helps if the banker is your friend)
3. Focus on your core business and use services to do the rest (like bookkeeping!)
4. Change with the changing needs of your customers to keep their business.
5. Use layoffs sparingly, and be careful.

Two of these bullet points I think are less common sense than the rest.

Point 3, focus on your core business, is not obvious at first. Why should you hire a company to do something you could do yourself-especially in times of economic turbulence? Any time you are spending on ancillary business tasks, like bookkeeping, cleaning, car maintenance, etc., is time you could be selling, improving your product, and building customer and employee satisfaction.

Point 5 may also run counter-intuitive. When things are tough, you need to layoff, right? Not so fast. By getting rid of employees, you are thinning your resources that will help you get out of tough times. In addition, when the recession is over, you will have to start over hiring good employees, which is an expensive and time consuming process. Not to mention the loyalty you will build by making sacrifices yourself in order to keep as many people on board as possible.

Photo by houstonian