Thursday, October 23, 2008

More tips for troubled times

Still on the recession watch, here’s a list of best management practices for tough times – as compiled by the folks at Toronto-based Newport Partners, an organization that provides both financial and management advice to business owners.

Newport recently gathered together a number of business owners in their network to share war stories and “lessons learned.” Here are some highlights.

1. Cash is king. According to Newport Partners’ Don Lenz, “The companies and the individuals who manage through these periods successfully are the ones who stay close to shore.” Until greater certainty returns to the economy, build your cash position. Look at every expense to find areas you can trim. Stretch out your payables.

As one entrepreneur commented, “It’s not the time to be the best payer. It’s not the time for vision. It’s a time for managing cash.”

2. Communicate to your employees, your customers, your suppliers and your bankers. Says Lenz, “Sunshine is the best disinfectant. It’s better to have people aware of the challenges you’re experiencing and what you’re doing about them than to deliver negative surprises.”

3. Help your customers through their tough times. According to Gus Gougoulias of Gusgo Transport, “Sometimes people drop their pricing because they think that’s what’s expected [in tough times]. But you win more by providing extraordinary service and staying close to your best customers. When they go through tough times, share with them in the best way possible. If they need you to stay open seven days a week, do it - just make sure it works from a cost point of view. When the good times return, your customers will continue their loyalty to your business relationship.”

4. Consider strategic moves that don’t involve capital. Look at mergers, joint ventures or even informal partnerships. Mergers can reduce overhead and sometimes provide strategic opportunities while partnerships can reduce risk and open up new opportunities.

If you want to read the full report, drop me an e-mail at rick (at) rickspence.ca. I will e-mail you the full text of Newport's release (in handy PDF format). It has three more points for running your business better, and seven tips for managing your personal fortune (if any).

My column in the Financial Post this week covers similar ground. To read "Nurturing relationships key in tough times," just click here.

1 comment:

Sarah said...

A couple more things your business can do . . .

Get involved with the community around you, and do something positive. People want to support businesses that are not just about themselves, and are involved with the community. You don't have to spend a lot of money . . . try hooking up with the neighborhood’s council, or doing a small volunteer project that is mentioned in the neighborhood paper. It will help to keep your customers coming and loyal.

Also, if you need more help, consider hiring moms and dads who work-from home. There is a recent trend for educated family members to stay home, and many would love the opportunity to supplement their income. Since the caliber of today’s stay-at-home moms and dads is so high, the work they do is quite comparable, if not better. Typically, they are cheaper and more of the personalized than hiring another employee.
http://www.work-from-home-job.com/