Weathering the Economic Storm
Vistage Best Practices for SME’s
August 14, 2008, SAN DIEGO –A best practices report for businesses on sustaining growth in challenging economic times was released today by Vistage International, the world’s leading chief executive performance organization. As economic forecasters have identified that the current downturn will likely continue into 2009, Vistage International has collected insights from experts on how businesses can weather the economic storm and continue to grow. Here are some tips for finding opportunities in the downturn:<o:p></o:p>
Borrow smartly/Renegotiate your loan terms
Bankers are often willing to stretch out payments or renegotiate loan terms for good customers. Starting a line of credit with a second lender can give you more options, negotiating power and an alternative in case your bank begins to view your company as a risk.
Renegotiate deals with suppliers
Renegotiating deals with your current suppliers to get a lower cost on goods or to extend your payment terms and thereby avoid borrowing money. Both actions will increase your profit margins.
Boost your advertising
Companies can take business from weak competitors and position themselves for future growth by advertising more when others advertise less. Companies that don't cut advertising reap disproportionate rewards once the hard times are over. This approach works best when the competition has cut its ad expenditures significantly (between 40 to 60 percent).
Upgrade your personnel
Take stock of your staff with an eye to increasing both your available cash and your profitability. Which of your weaker performers can be replaced by high performers? Don’t get rid of your good employees, as you will lose the money you put into their training.
Expand internationally
Any company with the potential for an international sales presence should look into establishing one. While the dollar is weak, American goods and services are highly affordable abroad. Foreign sales and exports are a sort of insurance policy for many companies.
Don’t lower prices, add value
Lowering your price tends to hurt your brand and makes it difficult to raise prices later. Instead, create a new value proposition that makes your prices appear lower.
Make use of your peers
Talk to or meet with other business owners in your industry. Get together to share fresh ideas and new perspectives. CEO membership organizations such as Vistage International exist for this very purpose. Vistage offers a free booklet “Managing in an Uncertain Economy” at Vistage.com/economy.
Media Contact: Lois Arbogast, Vistage International- 858.509.5861