Ideas for Difficult Times

Ignoring or avoiding the current challenging business environment is simply not possible. The credit crisis, stock market meltdown, and looming recession are all affecting the attitudes and actions of consumers, employees, investors, lenders and business managers. What are some helpful ideas to respond effectively?

Stay focused

Avoid being distracted by the bombardment of bad news. Stay focused on customers and employees, especially the ones that you have and you want to keep. Don’t freeze. But don’t over-react. Be calm, rational, reassuring and pro-active. Don’t just share their pain, provide relief. Misery may love company, but everybody still remains miserable if you just talk about it and do nothing. Try to be more creative and take appropriate action. Don’t neglect the good news – the Canadian dollar and interest rates are down so maybe you can expedite US dollar receipts or re-finance some lending to improve your results.

Be relevant

Take a close look at your customers’ changing needs and your product or service offerings. Do you have recession proof products or are they vulnerable? Costumers will be postponing or redirecting their purchase decisions in the current climate. Can you keep their business with a new cost-reduced service or more creative approach to packaging, pricing, terms and conditions?

Leverage the sense of urgency

Nobody is unaware of the current circumstances affecting your business. Employees are already focused on the problems, so it will be easier to get them to accept the solutions. That means being more receptive to expense reductions, removing frills, postponing projects, reducing assets and conserving cash. It may be opportune to revise compensation or bonus plans, change distribution channels, move marketing programs to lower cost Internet approaches. Take advantage of the sense of urgency that exists. Now is the time to resolve lingering problems; just be cautious not to do permanent damage to key employee, customer and supplier relationships that you want retain.

Recognize the changing environment

You probably started the year under different assumptions. That affected budgets and compensation plans. Sales targets may now be unrealistic and should be adjusted downwards to continue to reward and motivate top performers. Try to use an external benchmark to justify the adjustment and not give the impression that you are forgiving poor performance.

Look for opportunities generated by the crisis

If you have been smart enough to stash cash and build a relatively secure business, then you can take advantage of some unique opportunities that exist. Build your team by attracting top performing employees who may be ready to move from your competitors into your welcoming arms. Or take out a competitor if the whole company is for sale at a bargain price. The big boys are doing it; so can you.

Avoid being the unwilling prey

Competitors may see you in difficulty and recognize their opportunity to raid key employees or buy you out at a bargain price. You need to keep close to your key employees and ensure their career plan remains with you. If you are a likely target for merger or acquisition, then start working on your choice of preferred partner and determine your business valuation under normal circumstances, not distress pricing.

Talk to your banker

Make sure she is not worrying unnecessarily. Or at least worrying for the right reasons and hearing them directly from you. If you are in better shape than most and credit is available, then increase your credit limits now to support the opportunities you want to take advantage of.

Be focused, be flexible, and be creative.

Analyze, decide, and take action. You and your business will be better for it.