When the economy slows down, market swings into the negative direction. You should be smart enough to manage your business in this tough time. During this time, an entrepreneur should think of reduction of business expenses by means of proper resource allocation and consolidation of businesses. At the same time, you should not compromise with your product or service quality to stay competitive in the market. From my standpoint, I think if a company follow the following procedures, the business is going to be benefited in terms of expenditure.
1.You should keep track of your cash flow. You should convert all of your inventories into cash so that you remain protected during bad sale period. Try to reduce the stock as much possible compared to before.
2.You should source your product or services locally if possible. That improves the local economy. Simultaneously, it is going to lower the cost of your supply chain system. One offhand example is the transportation cost.
3.You can ask your supplier to provide you product or raw materials on credit until the worst part of recession is over. So, there is not going to be any immediate cash crunch.
4.It is imperative to continue your marketing and advertisement effort during recession period. But, you have to look at it very closely so that the spend in those areas is carried out in an effective manner.
5.Promote your business with inexpensive blogs, free press release, websites etc. Use free software like Google, Linux or Open source One.
6.You can get short term loans for any situation in which you need funds right away. But , please, try to pay the money back on time. These cash advance type of loans are available through various lenders to businesses.
7.Travel ranks third after payroll and expenses in terms of business expenses. Many big companies cut down their expenditure by means of video conferencing instead of long distance travel. Hotels located close to the major areas where youll be doing business can save you valuable time.
8.Buying used items for your office can help keep your start-up costs in check. Also, try to use your company telephone in a judicious way so that end of the month bill is not so staggering.
9.For product based industries, scheduling of production well in advance, based on marketing estimates, provides big cost savings. Suppose, a toy manufacturing company has enough time, it can use just one or two moulds to produce all the necessary quantities of a popular toy, instead of going for several moulds simultaneously. That can save capital cost of moulds in a significant way.
10.In case of extreme financial difficulties, you may need to trim extra fat of your company. In that case, lay off may be a viable, although, undesirable option.