Negotiating A Downturn
By Joseph Deliso
Deliso heads Blackstone Management & Consulting of Sutton and is a specialist in providing strategy and leadership assistance to organizations in periods of transition.
10. ADDRESS DENIAL
When times get tough, managers often try to stay in their comfort zone. Be certain all management clearly understands the situation.
9. CASH IS KING
Focus your company on strategies that assure the company maintains its ability to generate cash.
8. FREEZE EXPANSION
When you see a downturn on the horizon, shelf expansion plans until you the downturn’s impact.
7. MANAGE ASSETS
Reduce inventories where possible. Carefully justify your capital expenditures to preserve both cash and credit availability.
6. TIGHTEN CREDIT POLICIES
Watch your accounts receivable and tighten policies when issuing credit.
5. REDUCE OVERHEAD
If you sense a reduction in sales on the horizon, it’s most likely on the way. So plan for a lower level of activity and size your organization accordingly.
4. LOOK OUT, NOT IN
Hard times often cause companies to become internally focused. Don’t. This is the time for marketing and sales to really work.
3. PRESERVE RESERVES
Set the goal of exiting a downturn with the same reserves you had when you entered.
2. BANK ON YOUR BANK
The golden rule of corporate borrowing is never give a banker a reason to lose faith in you. Keep them updated with news both good and bad.
1. DON’T PANIC
If you have a basically sound business, are not overly leveraged and stay focused on maintaining profitability, you will likely come out fine.
