An economic slowdown is a phase of the cycle, in which the economy as a whole declined. This is indeed the end of the period of growth in the business cycle. The economic downturn characterized by lower consumer purchases (especially of durable goods) and then a reduction in levels of production of enterprises. Even if the economic downturn are admittedly difficult, and are formidable obstacles to small businesses who were trying to survive and grow, an economic downturn can open up opportunities. A well-managed companies can have the opportunity to market share by getting customers to their competitors. Resourceful entrepreneurs capture the available opportunities, an economic downturn and the development of alternative methods on how companies that have never been implemented in a period of growth before. The challenge of successfully navigating your business through an economic downturn lies in the reorganization of your company with the current economic realities. Specifically, you need as a business owner to renew on your core clients / customers, reduce your operating costs to save money, and management of proactive rather than reactive, is of the utmost importance. Here are the best practices to help you successfully navigate your business with an economic downturn: Goals: The goal of every entrepreneur is to survive the current economic downturn and to develop a leaner, more profitable and efficient operation. The secondary objective is to grow the business even in this time of economic downturn. Objectives: • Conserve cash. • Protect your assets. • reduction of costs. • improving efficiency. • Grow customer base. Action: • Do not panic … History shows that the economic downturn is not eternal. Stay calm and act rationally, as you focus your attention again to change your business in the current economic conditions. • Focus on what you can control … Do not let yourself hold over the media rhetoric of recessions and economic slowdown, achieving commercial success. It’s a trap! Why? Since the state of the economy outside of your control.

Surviving an economic downturn requires a focus on, what can you control, ie your relevant business activities. • Communicate communicate, communicate! Hats grope you from the trap and make too much yourself. It is a difficult task indeed to survive and grow your business solely with your own efforts. Solicit ideas and seek help from other people (your employees, suppliers, creditors, customers and consultants). Communicate honestly and consistently. Effective two-way communication is the key. • Negotiate, negotiate, negotiate! The value of a strong group of negotiating skills can not be overestimated. Negotiate best deals and contracts is an absolute must for realigning and resizing your company in the current economic conditions. The key is to not only know how to create a win-win approach developed in negotiations with all parties, but also in consideration that you have a favorable outcome for themselves.

Recommended Best Practice Activities: The Nuts and Bolts … The following list of activities recommended practice is for the survival of your company and its growth during the critical economic downturn. The actual financial health of your business especially at the beginning of the economic downturn, dictate the priority and urgency of the implementation of the following best practices. 1. The situation in the vicinity of your cash flow: cash flow forecast for your monthly to ensure that expenses and planned expenditures are in line with the demands. Include cash flow statements into your monthly financial reports. Cash requirements of the project from three to six months in advance. The key is how to monitor, protect, control, and provided funding for their work. 2. Carefully convert your inventories: Convert more, obsolete and slow moving inventory items into cash. Consider a slow back and items from the suppliers. Close-out or change their inventory to reduce working well with your inventory. Also, consider narrowing your product offerings. Right time of order placement helps to a level of surplus stocks and occasional material shortages reduced. The key is the amount of your inventory, without reducing sales. 3. Timely collection of your debts: This system should be implemented as soon as possible in cash. Offer discounts to encourage timely payment. Make changes in the conditions of sale for slow paying customers (eg, changing terms of net 30 days for COD). Invoicing is an important part of managing your cash. The first rule of invoicing is to as soon as possible after products are shipped and / or after birth. Focus on reducing billing errors. Most customers delay payments because of invoice errors and will therefore not pay until you receive corrected copies. E-mail or fax your invoices to save on transmission time. Post the payments that you received their payments and more frequent.

The key is to develop an efficient collection generates the time payment and gives you hints problems. 4. Refocusing your attention to your existing clients / customers: Make customer satisfaction your priority. A regular review of your customer buying history and frequency of purchases can show some interesting facts about the buying behavior of your customers. Consider signing long-term contracts with your key clients / customers which will contribute to your safety. Offer a discount for immediate cash. The key is to do what to do to your loyal customers. 5. Re-negotiate with your suppliers, lenders and owners: i) Suppliers: Do you tell your negotiations at the level of need that your company has reviewed its cost structure and has determined it must reduce costs to suppliers. . Tell the supplier that you value the relationship you have developed, but you need to immediately benefit from cost reductions. Ask your supplier for a lower price than the material, a longer payment cycle time and disposal costs of financing. Also, see if you are accessible to them to buy a car. Be willing in return for their price concessions to accept a long-term contract. Explore the idea of barter as a form of payment. ii) Lenders: Everything in business finance is negotiable and your relationship with a bank is no exception. The first step to successful renegotiations is to convince your lenders about it that you ultimately pay off the loan renegotiation. You must tell your lender, why accept it in their own interest, a new agreement. By showing them your business plan and your action plan that includes cost savings initiatives, and the “how” and “when” is to implement your plan the best way to achieve that this objective. Explain that you need their cooperation to ensure that we can survive, grow your business during the economic recession. Items are negotiated: the interest rate, the necessary guarantee for the loan and the timing cover of the early repayment. A start date for repayment could be immediate, within several months or as long as a year.

The key is to realize that your lender will work with you, but that frequent and continuous communication with them is critical. iii) Owner: Meet with your landlord. Explain your need for the duration of your lease at a reduced price to renew. Make sure that a clause in the lease that you have the right to sublease all or part of the allowed space. 6. Reassessment of your staffing requirements: This is a very important area. Salaries are a major cost of doing business. Therefore, a reduction would be hours through changes in working hours worked, benefit redundancies in the short term or permanent layoffs for an immediate cost savings. Most companies have stepped up the recruitment of new employees in good times, but they now find are superfluous to slow through the sale during the recession. With regard to the reduction of your employees, beware of your employees to a level that forces you to skimp on customer service and reduce the quality. Use part-time or the current trend toward outsourcing of certain functions to independent contractors. 7. Shop for better insurances rates: Get quotations from other insurance agents for comparable coverage to determine if your current insurer is competitive. Also consider revising your coverage to reduce premium costs to. The key is to have a good balance, be adequately insured, but not more or less assured. 8. Reassessment of your advertising: Contrary to what the other cost reduction initiatives to assess the possibility of increasing your advertising expenditures.

This tactic recognizes the advantage that the “noise” and congestion advertisers (less) on the market. The period of decline, an excellent opportunity to raise awareness and create additional demand for your product or service offering. 9. Take the help of outside advisors: The use of an advisory board by your accountant, lawyer and business consultant offers you objectivity and included offers professional advice and guidance. Their combined experience in dealing with similar situations in past economic downturns is invaluable. 10. Check your other expenses: Target into a: The cost-reduction potential of 10-15%. Try to avoid unnecessary costs. They tighten their belts to weather the economic downturn makes sense practically and financially. The proactive management of your company through an economic downturn is an enormous challenge and a prerequisite for survival. But through well-planned initiatives, an economic downturn can gain tremendous opportunity for your company to create a larger market share. To take advantage of this growth opportunity, you must act quickly to get the best business practices to continue to implement restructuring and resizing your company in the current economic conditions.