Top 10 Survival Tactics in a Tough Economy
Thomas E. Houck is a speaker, author and consultant whose program, “Your CFO Advantage” helps business owners grow their companies. reduce their taxes and lower their stress level.
Here are his top 10 survival tactics to help small business owners in a tough economy:
1. Cash flow is king—As a small business owner, you must know how your cash flows. This isn’t fancy accounting; it’s simply tracking how cash
comes in versus how it goes out. Take two hours, and use your QuickBooks or check register to get a grasp of this monetary movement.
2. Trim the fat—When cash flow is good, “fat” tends to accumulate. Now is the time to look at where your money is going and eliminate unnecessary items. This includes the business Hummer, that expensive copier lease and the T1 connection instead of basic cable modem. You may need to make some tough decisions about eliminating employees. It’s critical that you get your cash outflows to a manageable level ASAP.
3. Look into the future—When clients and projects are rolling, most entrepreneurs believed new business can materialize whenever things temporarily slowed down. Those times are gone. During the next three months, analyze what money is coming in; specifically from where and when.
Compare this to the new cash outflows you assessed in the step above. If things are tight, that’s fine. But, if more is going out than coming in, trim more and find additional income. Do this exercise each month, always looking at least three months out.
4. Get back to basics—When you first went into business, you may have had to fight and claw to make ends meet. Make a list of the things you did back then to bring in revenue. You probably moved away from many of those strategies when business improved. This is the time to aggressively return to them.