Hell Puppy
10-11-2008, 12:49 AM
I dont profess to be an expert, but I have ridden out a couple of these. I'll share some thoughts, would love to hear from others who have been through bad times as well.
Cash is king.
Watch your cash flow like a hawk. Not counting every penny where it comes from and where it goes? You better start counting. You may be living and doing business on assumptions that things are like they were a year ago. Dont wait til the bank account is dry to figure that out. Know how much is coming in and from where and how much is going out and for what. I cant emphasize this enough.
Do you have accounts receivable? Be less tolerant of late and slow pay. Dont let big accounts receivable numbers get you in trouble. In this business, that means beware when the sponsor or biller check is later and later.
When the shoe is on the other foot, protect your credit and your relationships, but if you have a NET 30, pay it at 30 days, not 15, 20, or even 29.
Beware of your credit card and credit lines. This is a credit crunch unlike we've seen before. I haven't experienced it yet, but lots of reports of limits being lowered and especially on business cards the companies are asking for fresh financials before extending large amounts of credit. Might be interesting in vegas to see what happens when Amex's with "no limit" are declined when trying to charge $5K+ per night suites.
Build your cash reserves. Only spend what you have to, postpone what you can.
If you have more than a handful of employees, good time to review salaries and positions and cut some dead wood. Look at your marketing spends and dump anything not working. Enhancing your sites, projects or products? Will it bring more cash? If not, postpone it. Can you automate something and let someone go? Do it. Sales budgets should be heavily commissions based, cut base, raise commissions. Upgrades that can wait, should would wait. Look for opportunities to optimize operations.
Analyze every dollar being spent like it's your last. Ask yourself, what happens if I dont spend this? If it doesn't bring ROI, dont do it. This is where the nerdy guys with 5 spreadsheets open on their desk all day long are worth their weight in gold. They cost money, but they will wring out more than enough to pay for themselves.
Strengthen your relationship with the people who bring you money. This is one area where you spend. Now is the time to treat them as a partner, especially the big ones. Call 'em, touch base, ask 'em how they're doing. Do they have problems you can help them with? Better yet, can you both find a way to make more money? This is my exception to the rule on sales people. Your sales people who do this well should be empowered and rewarded more than usual for bringing more business. And dont be afraid to spend on the customer. Taking someone to lunch in a down economy goes further than it does when money is falling from the sky for everyone.
Anyone have stuff to add? Differing opinions...?
Cash is king.
Watch your cash flow like a hawk. Not counting every penny where it comes from and where it goes? You better start counting. You may be living and doing business on assumptions that things are like they were a year ago. Dont wait til the bank account is dry to figure that out. Know how much is coming in and from where and how much is going out and for what. I cant emphasize this enough.
Do you have accounts receivable? Be less tolerant of late and slow pay. Dont let big accounts receivable numbers get you in trouble. In this business, that means beware when the sponsor or biller check is later and later.
When the shoe is on the other foot, protect your credit and your relationships, but if you have a NET 30, pay it at 30 days, not 15, 20, or even 29.
Beware of your credit card and credit lines. This is a credit crunch unlike we've seen before. I haven't experienced it yet, but lots of reports of limits being lowered and especially on business cards the companies are asking for fresh financials before extending large amounts of credit. Might be interesting in vegas to see what happens when Amex's with "no limit" are declined when trying to charge $5K+ per night suites.
Build your cash reserves. Only spend what you have to, postpone what you can.
If you have more than a handful of employees, good time to review salaries and positions and cut some dead wood. Look at your marketing spends and dump anything not working. Enhancing your sites, projects or products? Will it bring more cash? If not, postpone it. Can you automate something and let someone go? Do it. Sales budgets should be heavily commissions based, cut base, raise commissions. Upgrades that can wait, should would wait. Look for opportunities to optimize operations.
Analyze every dollar being spent like it's your last. Ask yourself, what happens if I dont spend this? If it doesn't bring ROI, dont do it. This is where the nerdy guys with 5 spreadsheets open on their desk all day long are worth their weight in gold. They cost money, but they will wring out more than enough to pay for themselves.
Strengthen your relationship with the people who bring you money. This is one area where you spend. Now is the time to treat them as a partner, especially the big ones. Call 'em, touch base, ask 'em how they're doing. Do they have problems you can help them with? Better yet, can you both find a way to make more money? This is my exception to the rule on sales people. Your sales people who do this well should be empowered and rewarded more than usual for bringing more business. And dont be afraid to spend on the customer. Taking someone to lunch in a down economy goes further than it does when money is falling from the sky for everyone.
Anyone have stuff to add? Differing opinions...?