Entrepreneurial Development Center

By Curtis Nelson, EDC President & CEO

Managing through tough economic times becomes a greater burden on entrepreneurs who are already cutting corners to cultivate their businesses. Of critical importance is the management of cash, though there are several other areas to which you should pay special attention. Listed below are 10 tips to help manage accordingly:

• First - make sure you are properly watching and managing your cash. Watch how fast you are paying your payables, how much inventory you are buying, etc. Of critical importance is your payroll and tax obligations, and you don't want to be short.


• Maintain a close relationship with your banker and keep him/her updated on the status of the company.


• Make sure that everyone on your team is contributing to the positive performance of your business. Now is not the time to keep staff around that is not contributing daily. At the same time, consider not replacing employees that leave, unless it is critical.


• Do not make any significant capital investments, unless is necessary to keep the business running.


• If increased sales are what you need, consider the fact that you, the owner / CEO, might just be the best person qualified to be on the street every day generating those sales. You are the one with the passion, the knowledge, and strongest need – don’t delegate to chance what you can cause to occur. I meet often with business owners looking for bridge capital to get through tough times and they are spending days / weeks in this process when in many cases they could have applied the same time and talent to generating new sales revenue.


• Make sure your business is focusing on a well-diversified customer base. You don’t want to have so much of your revenue dependent on a single customer so that if they went away -- you would also go away.


• Consider employing more public relations as part of your marketing mix. It can be less expensive per impression and having more press can give credibility to your product/company and generate sales leads.


• Pay special attention to your active customer base to make sure you are keeping them – now is not the time to lose a customer due to lack of attention. And who knows, an extra call might generate a new order or referral.


• Closely monitor gross margins by product and by customer to detect any negative impact that may be caused by increasing costs or lower selling prices. It may be that you have customers that either need to get new pricing or find another vendor. It may also be that you have a particular salesperson that is cutting your pricing further than necessary to “buy” business.


• Don’t lose track of the fact that business should be fun. Economic downturns are fact of life. Most businesses survive and are strengthened in the process. Provided you don’t employ the ostrich approach, you will likely succeed accordingly.

There are many more ideas for managing your business successfully in an economic downturn that become specific to your business.  These are the types of issues that the Entrepreneurial Development Center can help you face. For more information contact us.