How to survive difficult times
Here are some tips on how you can prepare your business for a possible economic slowdown.
Apr 30, 2012 14:00 pm
As entrepreneurs, our main focus is running the business. We concentrate on getting the right suppliers, arranging enough financing for inventory, and marketing effectively to customers. We normally don’t have time to follow developments in the global financial markets because unless we invest regularly in them, they won’t affect us that much.
We have yet to see how serious this emerging global recession is going to affect us. But it is better to prepare ourselves to survive this crisis.
So, as an entrepreneur, what should you do?
1. Start analyzing the profile of your clients. How many of your clients are most likely to be affected by this crisis? Are they exporters? Do they invest heavily overseas? Are you familiar with the owners and their affiliations?
These are just some of the questions that you should ask yourself when you do a quick profiling. Of course, it is also important to avoid relying on just a few major customers or industries for your sales generation. To lower your risk, you need to consider diversifying and broadening your customer base.
2. To cushion the impact of lower sales, you need to protect your income by lowering your expenses. Review your expenses and try to see what items you can possibly cut down. Do you need to save on electricity and utilities? Are you paying your employees too much for overtime work? How much do you spend for office supplies every month?
You can do this by preparing a budget for the year that incorporates only the overhead costs that you find essential in running the business. Make sure the budget targets you set are realistic. To attain your goal, enforce corporate discipline when implementing the budget.