Sunday, May 13, 2012

10 Tips for Recession Proofing Your Business

I emailed Chris Polek CEO @ Polek & Polek a few weeks ago to see if he would like to be one of our Guest Bloggers and Chris emailed me back with the article below. I can remember doing business with Polek & Polek back in the eighties when I had my own dealership. Polek & Polek is also a long time supporter for the Print4Pay Hotel forums and if you're not familar with them, just click on the banner ad for a trip to their web site.

1)            Always Run Your Company Leaner Than You Would Like Especially during the good times. When The Great Recession hit in 2008 most companies were forced to start running their companies leaner. Downsizing was painful, and as companies emerged from the recession they discovered they were able to still accomplish results with less. Many owners made remorseful comments such as: “I should have been running my company this lean even when times were good!”

 How do you know if you’re running your company too lean? When you start to hear your em-ployees complain (as long as they are focused on doing the right things), then you have probably
hit the point where you can run your company as lean as possible. If you are not hearing any of
your employees complain, that is good sign that you can run your company leaner; start looking
for what resources that you can live without.

What about areas that you don’t want to cut back? Any of the resources that help keep custom-
ers, and grow our customer base. We can grow the share of our customers, or add new ones; I
advocate doing both. Also, your top people who perform well, and are always there through
thick and thin, don’t cut back on that. Support those people, and give them plenty of recogni-
tion; even during the tough times. Everything outside of that should be considered discretionary

You need to relentlessly run your company lean, even during the good times. This will allow you
to be productive and efficient. You can build reserves to be prepared for the tough times.
2)            Customer Loyalty
Will they continue to do business with you, and do they (not will they) give referrals? If you can
answer yes and yes, that is the definition of a loyal customer, and you need to guard those cus-
tomers with your life! Do you keep track of the customers that you lose versus the ones that you
keep? If not, you need to take immediate action on doing that, and resolve to improve that
number in 2012 from where it is in 2011.

It is not just about finding customers, it is also about keeping them. The more customers that
you can keep improve your chances for overall growth!
3)            Identify Your Company’s Top 3 Goals/Objectives
If you want your people to be accountable, it will never happen unless they are measured against
goals. The goals need to be specific. Increase revenue in 2012 is not a goal. Grow revenue 10%
in 2012 versus 2011 is a goal. You need to identify the Top 3 Critical Goals in your business for
2012, make them specific, and everyone in the organization must know what they are. You want
to do that so your employees won’t spend time working on things that are less important. Al-
ways ask your employees: How is this project helping us achieve our critical objectives?”

4)            Managing Employee Performance
I believe if we were all honest, we would agree that we have a few employees that just can’t
seem to get it done. It is not the most popular problem to deal with, but you have to deal with it
head on. If you don’t, you end up increasing your cost structure because you have people work-
ing for you that are not getting done what you need to get done. When times get tough, you
look at potentially downsizing your work force, and you may not have needed to do that if the
people working for you produced the results that you need. Be tough on performance, and
make sure that you take care of your people along the way.

5)            Sales Productivity
When you break it down, sales is all about the numbers, and you want to be as productive as you
can be. You need to know at a moment’s notice which people on your team are on target for
their quota or not, so that you can work to consistently hit those quotas. Get senior manage-
ment involved to help close important new business. Also, make sure that your people are only
pursuing business that they can win.

6)            Accuracy of Sales Forecasts
It is a big struggle when sales forecasts are put together, and they are way off. When it is too far
off, it is difficult to make future investments in the company, because you are not really sure
what is going to happen. Have a specific sales process in place, and have all your people drive
that same process, so that your sales people can consistently hit the numbers.
7)            Accounts Receivable
Particularly when times get tough, you are going to have to deal with companies that are slow
paying, and you have to remember that you are not the bank. It is important for your customers
to pay you on time.

Start by inspecting all the invoices that go past the 89th day, because once an invoice hits 90 days,
that spells trouble! Look for the reasons those invoices are getting to 90 days, and make sure
that your internal processes are not part of the problems why those invoices are that old; and
start solving those problems. Once you have done that, start targeting the invoices that are at 75
days, and go through the same process. Then target invoices at 60 days. You can see the direc-
tion we are headed. Remember: You are NOT the bank!

8)            Employee Productivity
Most of companies really don’t measure employee productivity, whether they have 10 employ-
ees or 100 employees. However, the most of our expenses are employee related. How do we
know how effective the people are that we have? Productivity does matter, but measuring pro-
ductivity without the right goals makes no sense.

Make sure that you have those Top Three Critical Goals in place and aligned, so that your em-
ployees are always working on what matters most.
9)            Don’t Wait
Do you believe a recession is on the horizon? Do you believe that competition may be fiercer
where you could see a 10% or more drop in revenue? Do you foresee inflation from your com-
pany’s expenses, where you are unable to raise your prices to pass along that cost increase?
When you do, don’t wait! Think about the things that you would have to do to combat that chal-
lenge, and then act as if it has already happened! Act immediately! Take the steps to run your
company leaner than you would like to, and your company will have the opportunity to perform
when things get tough.

10)         Recession Does Not Equal Failure
Don’t buy into the whole myth that recessions will cause failure. When you run your company
leaner than you would like to, especially during the good times, you give your company the op-
portunity to be stronger during the tough times.
Yes, recessions will thin the herd of competition, and the stronger companies can have their big-
gest spurts of growth during a recession because they are blowing past the weaker competition.
It all comes back to focusing on the previous points, that will help you recession proof your busi-
Polek & Polek is a 2nd generation family-owned business located in New Jersey and has been
increasing imaging dealers’ profits since 1974! Are you interested in discovering and implement-
ing strategies that can make your dealership even more profitable during the most challenging
economic times of this century?

Polek & Polek can show you how!
or Call Toll Free: 800.526.1360

-=Good Selling=-


Maud Jarrett said...

I'm new here in business world and I'm looking for tips and advice's, and maybe this tip's and advice's give this article is effective. I looking forward using it. :)

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