With the economy in turmoil and more and more businesses closing their doors, business owners have to start getting more creative in what they are doing to stay afloat, according to experts.
Bobbi Hoff, a certified public accountant with Pisenti & Brinker, and Steve Jannicelli, senior business consultant with Moss Adams, give some pointers as to how businesses can get through these times.
“To me, the biggest premise is how you think about this,” said Mr. Jannicelli. “Is this just a temporary blip or long-term problem? If you treat this as something that is going to go away in a couple of months you will think in a certain way. If you realize this will be here for a while, you will think differently.”
Ms. Hoff said asking the right questions about what a business can do with what it has will provide answers to get through these tough times. She suggested:
Do some belt tightening. Eliminating the fat, cutting down on redundancies in the processes of the organization and right-sizing the organization by optimizing what you are getting from your employees will save a considerable amount of time and money, she said.
Of course, layoffs can be far from where a business owner wants to go. Look at alternatives first, such as reducing hours or asking employees to take a couple of unpaid days off per month.
“Things like that are a better alternative than layoffs,” Ms. Hoff said. “It may not be ideal, but if it retains people’s jobs, that is what counts.”
Look for bargains with vendors. If the business has the ability, paying bills more quickly can help a struggling vendor and could result in a larger discount for prompt payment.
Maintain good customer service. Remembering that your clients are going through the same challenges you are will help keep them, said Ms. Hoff. “This is not the time to cut corners in customer service,” she said.
“One of the things I think is key is to go with the premise that everyone is affected by this, including your customers,” Mr. Jannicelli said.
And realizing that circumstances are shifting for everyone will provide perspective, he said.
“Trying to sell what you sold to whom you sold it and for the price you sold it before just is not going to work,” he added.
Mr. Jannicelli recommends rethinking the marketplace and where your business fits in.
Establish a budget and plan appropriately. “A lot of it is just getting back to fundamental financial management,” Mr. Jannicelli said.
And not just living on credit, both on a personal and business basis, will keep things more manageable. “We have all borrowed money as a source of cash for a long time,” he said.
Ask some of the fundamental questions such as how does your business generate money? If you can answer this now and in the current marketplace, Mr. Jannicelli said, you will be in a much better position to stay in business.