Best Tips For Survival Of Entrepreneurs In Post Recession Period

Entrepreneurship | November 26, 2009 at 1:46 am

Hey all entrepreneurs, if Darwin would have been alive and seen this recession, he’d have surely come up with some infallible strategies for you to survive this bad economy. But alas we don’t have him around, so we’ve got to make our own strategies by carefully studying the market and planning tactfully.

Today, many entrepreneurs are being hit by the problem of low sales and decreased credit. The banks and other financial lenders are putting their foot backwards when it comes to extending a supportive hand to entrepreneurs. Also the recovery is being quite slow. So without life supporting apparatus can entrepreneurs swim across this financially recessional sea to safe shores? As a result, most entrepreneurs are thinking of quitting their present businesses. What would you do?

One obvious strategy that comes to anybody’s mind is to slash costs. This will help in getting you a lot of liquid funds, and that’s what most entrepreneurs are doing. But to tide over these difficult times, something more has to be done.

Cut Costs Judiciously

Cutting costs judiciously will get you the required results. Settle all your dues, sell extra office inventories. Rent out extra office space and sell off extra inventory. Cut off your phone bills.

It might be difficult for you ethically, but you’ve got to embark upon your cost cutting spree with an iron hand. If you have employees who are working with you for a long time but not delivering good quality you need to fire them, no matter how hard it may be for you ethically. When you yourself are in dearth of money, you cannot expect to be charitable.

Close Unprofitable Operations

Examine each and every operation of your business and identify which are important and profit giving to your organization. Identify the unprofitable ones and eliminate them. Hire an expert to do this for you if you cannot do it yourself. If you want to retain any talented staff doing these operations adjust them elsewhere.

Find Out an Alternative Source of Financing

You might be the CEO of your company, but if it is in bad times and you need funds, you can always take up a job or consultancy services or start to supplement your main income. Use the extra income to develop your main business.

Restructure Incentive Schemes

Paying fixed salaries regardless of performance may be difficult for you during tough economic times. A fair enough proposition is to link the pay to performance. You can increase the amount of money employees would receive as commission. Also the company bonus can be calculated on the degree of profits the company makes. This will save you unnecessary expenditures as you pay only for good work and not for wastage. Also the employees will be motivated to work better.

Follow these survival strategies and you are going to win in the most unlikely situations. Remember that when the going gets tough, the tough get going.