As many of you well know, the economy in Michigan is struggling. So as business owners what can we do to weather the storm? Here are some ideas to get you and your business through tough times.
¨ Be Frugal. Watch your expenses. This sound obvious, but look at each expenditure and ask yourself whether it is necessary or not. Can you cut certain expenses without jeopardizing sales?
¨ Look through your product or service lines for areas that are not profitable. Clearance the unproductive inventory and evaluate the need for services that don’t return a profit.
¨ Set up a cash flow plan. On a spreadsheet map out each month’s income and expenses. Plan ahead of time how much you will spend each month. Call our office if you would like a cash flow form to work from.
¨ Ask your staff for ideas on ways to save money. This will create an environment where they are partnering with you on ways to save, even if it’s just a few cents here and there. Everyone working together to clock out on time and turn off the lights will add up over time.
¨ Follow up on Accounts Receivable. Call after 30 days to collect your payment. Polite persistence pays.
¨ Use any extra cash flow to set up an emergency fund. The goal is to have 3-6 months of expenses in a business savings account.
¨ Pay down debt. A debt free business is as close to recession proof as you can get.
¨ Evaluate your pricing strategy. Can you hold your prices or do you need to pass some increases on to your customers.
¨ Go the extra mile with customer service. Give your clients and customers something to talk about.
¨ Think outside the box. Most companies pull back to selling just the basics when times are tough, but consumers can get the basics anywhere. Look for those unique products and services that will give your customers a reason to spend money.
¨ Evaluate your advertising. Is it effective? Look for inexpensive ways to get your company name out there. Check out the Word of Mouth Marketing book review under marketing ideas on the home page.