How is your small business to influence the current recession?
I find a wide variety of answers to that question. Some owners are still doing quite well, while others are just barely survive. It generally depends on the type of business you have and how well prepared you were when it began to slow down.
It was inevitable when you think about it. Extremes created by the Federal Reserve caused the housing bubble and poor practices of credit across the board. Whenever you have in excess, you can expect the downturn to follow.
Are we in a recession or a one and how you live?
Pay attention to your cash flow. Cash flow will determine whether you can keep the doors open. Put together a realistic cash flow statement forecast for at least six weeks in advance. Check to see how big cash reserve is.
Pay attention to accounts receivable. In bad times customers will be prone to hold their money and may be able to pay you. It is cheaper for them to use money than to borrow from the bank. Be assertive with your customers. Let them know that you expect to get paid, just as they do. Remember, it’s the squeaky wheel that gets the grease.
Cut out the fat you have in your business. You can consider reducing the work week for some your employees instead of laying them off. Employees would rather work a shorter week than not working at all. Remind them that you have to do what is necessary for the survival of your business and work.
How can you strengthen your small business in this recession?
Take a good look at your business. Does it promote life or running your life? Now is a good time to improve your business skills. What kind of system you have in place? Is the company dependent on you? Do you have a clear vision for your business and it is the vision fulfilled?
You may want to make an independent assessment of the business to see where the weak spots are and then learn how to strengthen them. Take the attitude that only good will come from this slowdown, and then make it a good strong company.