In dealing with many companies during these troubling times I have identified three specific areas that are crucial components of a recession proof strategy.  While a complete explanation demands more than can be written in a simply blog, the brief description below highlights the key areas of consideration.

Financial assessment and monitoring:

Realistic assessment from available capital, including the strength of the existing relationship with the bank, the collectability of all receivables, access to third-party loans or other equity partners, ability to utilize trade financing.

Strategic assessment of the marketplace:

For most companies, their market is constructing. Therefore the only way to achieve flat sales at worse and growth at best is to steal market share or sell into another market. To this, I am assessing the core competencies of the company to see if we can repackage, rebundle, or use some other strategic process to market the products and services differently. In this I strive for a service/product model, were as the service component produces a higher GP that can act as a subsidy when the products must be heavily discounted.

Managing human capital:

It is very important to provide transparency to the employees and address their issues and concerns. It is the unspoken word at the water cooler that will do the most damage at this time. It is a known fact that fearful employees are not creative, innovative or efficient. Provide as much information as you can, be assessable

In conclusion these are very difficult times.  However, it is also an opportunity for restructuring, retooling and rediscovering what the company can be. At some point this situation will turn around and company owners must not put themselves in a position that when it does finally turnaround they have engaged in so many cost reductions that they are not able to take advantage of the opportunity.

As I have said before, if we are going to find our way out of this recession we will be dependent upon the small and medium size businesses. For they have the experience of how to run lean, be creative to finance their business and their employees are accustomed to doing what it takes to get the job done, even  if it is not included in their job description. They are not about lavish pay packages or retreats to expensive resorts. It is the turning of the guard and tomorrow’s heroes will come from today’s unknown names.