| Let's start with another sales tip .. |
| This one is more about the selling process rather than quoting jobs. As estimators we often get locked in behind our desks and phones and email. In these tougher times you need to break those ties every once in a while and get out to SEE your customers ... Especially your good customers. Take some time to cement those bonds you currently have which you count on today. You need them now more than ever. So go out and get some face time. You may be surprised at the opportunities that open up and the open feedback you get during your visits. |
| This week we have another article |
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This time on recession proofing your business. Suddenly this is a hot topic a popular buzz word. In reality the idea of recession proofing is really just about structuring your business so the business’ success is not based on the idea of increasing sales but instead is based on the idea of flexible overheads that rise and fall with sales volume so you can profit in a wider range of sales volumes.
The article is written by David Bitton, the same person that prepared our last newsletter on cash flow management. David is our Prodictive Implementations Director and also a business management consultant specializing in the woodworking business. He has turned around numerous troubled companies. You may contact David with questions and comments via email here or by calling 800.381.2664.
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| Recession proofing your business |
| By now most areas of the country are feeling the full brunt of the economic slowdown and many are already in some sort of recession. The following tips will help you weather the storm: |
| 1. Do not panic. |
| The worst thing you can do is to panic. Any action taken under this state of mind is likely to hurt your business, not help. You are not the only one who is experiencing the effects of the slowdown/recession. You need to take action, so keep your cool ... you are going to need it. |
| 2. Prepare a downsizing Plan. |
| Review your operation and create a multi-level downsizing plan. For example if your business revenue is $5M and is going down, prepare plans for $4M, $3M and even $2M revenue levels. Identify your key employees and who is likely to exit the business in each phases of the downsizing. Identify which layers of “fat” you are going to shed and when. Think about the possibilities of renegotiating leases and loans to see if you can reduce the monthly overhead costs too. Write your plans down, or even better put it in a spreadsheet so you play with the numbers. It’s much easier to implement a plan when you have it written down. |
| 3. Watch your Income Statement Closely. |
| This is your roadmap. Know where you are now and where you should be. Aim for a bottom line of more than 12%, it will ensure a solid 7% bottom line. Allow for unexpected expenses such as a new engine for the truck or a head rebuild for your CNC machine. |
| 4. Review every part of your operation. |
| Ask yourself “is this expense absolutely necessary?” Examine direct and indirect expenses and eliminate all non critical expenses. It’s nice to get new business, but EVERY dollar you save in expenses is going STRAIGHT to your bottom line. In other words it is more beneficial to squeeze more money from cutting expenses than from chasing new business. |
| 5. Control your operation. |
| It is easy to be overwhelmed by the business. Feelings of helplessness, anxiety and fatigue are strong indicators that you lost control over your business. Don’t panic (see no.1 above). Ask yourself if you have systems and processes that will enable you effectively control the business. It may be the best time to put in place systems and processes to control your operation. |
| 6. Ask For Help. |
| If you tried your best and failed it’s time to call for help. The toughest part of all for business owners is to ask for help. Ego and other issues such as “no one knows my business better than me” are preventing them from getting the timely help they need before it’s too late. Do not get into a too little too late situation. |
| 7. Stay Positive and work the problem! |
| There is no better way to stay positive about things than to take some action. Share your concerns and thoughts with some outside advisors. Keep an open mind. Seek out your local Chamber of Commerce for instance. Just make sure to stay positive and take action. |
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