7 Ways to Survive the Great Recession
Numerous people have said this is the worst recession since the great depression
. When it first started, some said we would be out of it by the next year. The next year came and went and we were still going down. Once again the projections were repeated. We would be out of the recession the next year. That didn't happen either.Who could have thought this recession would be a worldwide event? Large public enterprises as well as national governments have been impacted. I would like to say we will be out of the recession a year from now, but I don't believe it.A lot has to happen for that to be true. It is my opinion we will be bumping along the bottom for a few years before we see any meaningful recovery. I know some companies will see meaningful growth but most will not. Here are seven ways to not only survive but improve your business in a recession.1. Decrease existing debt. Do all you can to decrease every liability. If you have lines of credit, pay them off and don't use them. When a loan is paid off, don't turn around and get more loans. This decrease in overhead is vital to a recession survival plan.2. Increase cash. This can be done by selling under utilized equipment and machinery. When you pay off a creditor, take the money you were paying and increase your cash reserve.3. Cut costs. Look at every expense. Cut every where possible. Instead of calling the same suppliers and vendors when you make orders, call three new companies and get their prices. If their prices are better, call your existing suppliers and use the better prices as leverage to negotiate more favorable pricing. Start using the new companies if they won't do it.4. Get rid of discretionary expenses. If you really don't need it, don't buy it.5. Change your fixed costs to variable costs. Companies usually have both fixed and variable expenses. Fixed expenses like loan payments do not change with variations in revenue. If possible, switch these costs to variable costs which are more controllable. As an alternative to buying equipment, rent it. Making loan payments on equipment when it sits in the shop in the off season is painful.6. Look for bargains. You can take advantage of opportunities as they come your way when you have a sufficient cash reserve. This is a good way to increase your market share and diversify you company's product lines and services. Keep in mind, this is a long-term strategy. Don't deplete your cash reserve.In a recession, businesses finding themselves leveraged and strapped for cash are willing to sell products, services, or even the entire business for favorable prices to buyers who have the available funds.7. Expand your horizons. See the big picture of life's purpose. I am a true believer in the saying, "You reap what you sow." Look for ways to make other people successful. Find ways to serve them without any strings attached. Inevitably these relationships will make you successful.
7 Ways to Survive the Great Recession
By: Joseph Phelon
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