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Coping with Downturn
Like everything in life, there will be highs and lows and business is no exception. When business declines, you may instinctively cut costs, but there may be other actions you could take and some of the following may be helpful in a downturn.
Promotional Strategies
Put some time and effort into broadcasting your value proposition to your target market. You would need to really understand what it is that you are good at and why a particular market would want to buy your goods or services. But once you have done that, follow through by committing time and money to getting the message out.
Budgeting and Cost Cutting
Certainly, reduce overhead and inventory costs wherever possible to release cash that has been locked up. Rework your budget and cash flow projections to ensure they reflect the realities of the situation. A flexible budget that is realistic will be easier to keep on track than one which is based on outdated targets and will allow you to spend appropriately in the new environment. Be disciplined and stick with it!
Morale Management
In a downturn, morale management becomes critical. A management team which maintains a positive approach and reinforces positive behaviour in staff will reap dividends and it goes without saying that employees should be rewarded for working well. Continually. Not necessarily just financially, for example it takes very little effort to thank someone, but that can make a big difference as to how employees feel on the job. High spirited employees are always more productive!
Communication
If your business does not already have it, creating an environment that encourages open communication helps to improve productivity in a number of ways. Invaluable ideas can come from unexpected quarters potentially improving products and processes alike and mistakes can be discussed with the staff concerned and rectified quickly without recrimination.
Structure
No-one is irreplaceable, and you wouldn’t want to replace your good employees, but what happens when one is away on leave? Does the work have to wait for the staff member’s return? How does that impact your business when times are tough already? By ensuring that each job/task in the business is learned by at least two employees, you create absolute job redundancy which allows work to continue smoothly when someone is away. Good for morale too, as employees are able to take leave knowing that they will not return to a backlog of work!
Professional Advice
Last but not least, obtaining appropriate professional advice is very important even in this information age where knowledge is so readily accessible on the internet. In most cases, professional advice will not only save you time, but also save you money and stress. The right professionals will help you diagnose your problems and advise what you need to do to fix your business before it’s too late – something that is always important but more so in times of downturn. Make the most of any downturn and take positive steps towards a bigger and better year!