Getting Real: Hope is not a Strategy
Reality hit our company, Logo Design Guru in the 4th quarter, and clearly, logos and websites are not immune to some recessional affects also. Amazingly, we still managed to grow by over 25% in 2008, but so did our expenses. My business partner and i reviewed our profit and loss statement, found a way to make significant cutbacks, and developed a gameplan for how we can make additional cutbacks depending on how January turns out. As “hopeful” as we are for the future, and excited as we are about the company, the reality is, that no one has any definitive clue what the future has in store for our economy.
So what in the heck do we do? Here are 10 ways you get your company back to a break even point, and allow your firm to retain cash, which is critical.
- Go through your P&L report item by item, and start eliminating any unnecessary expenses.
- Be sure to review your credit card statements. I can almost guarantee you’ll find some recurring charge from a software company or some other service that you haven’t used in months.
- If you have that employee who continually under performs, has an attitude problem, or doesn’t fit- now’s the time to let them go. It will not only help save your company, but probably simultaneously save you headache from having to deal with a frustrating employee.
- Ensure all major purchases are approved by you or someone else on your staff that will scrutinize the acquisitions, and be comfortable saying NO.
- Get everyone selling. If you have a support staff, train them to upsell clients. Anytime someone interfaces with a client, there is an opportunity to drive more sales. make sure they are compensated for it, otherwise, you won’t reap the ultimate benefit.
- Start making some business development calls. Everyone is looking for incremental income right now, and this may be your “in” to get the meeting you’ve dreamed about with a large partner.
- Cut back benefits. I’ve read some articles that recommend that companies cut back employees rather than benefits. However, if you feel you overcompensate for benefits, than maybe getting back to what is standard in your industry is reasonable, and would be accepted by employees
- Equity for salary reduction. If you have a couple key employees that are highly paid, and you REALLY like and value them- maybe they’d consider taking a paycut in exchange for some equity. in the long run, it benefits everyone.
- Across the board pay cuts. If you’ve been preaching (and you should have been) that you’re all in this together- than consider cutting everyone’s salary by 5 to 10% in lieu of layoffs. Most people would be happy to cut their pay rather than lose their job altogether.
- Layoffs. No one likes to do this. But, if you wait to long because it’s uncomfortable, you could be jeopardizing your small business, and all the employees. Be sure to put aside personal feelings and your employees personal situation as much as you can. Review your employees and gauge who is the LEAST essential, who’s worked can be absorbed by others with the least interruption, and who gets paid the most.
Try to make the cuts once, and only once, so the employees will feel comfortable that they are a long term solution, and to preserve morale. Keeping an open dialogue and being honest with your employees will go a long way.
If anyone has any other ideas- post em here. We’re all in this together.
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