Given the vast changes that have taken place in the economy and the uncertainties going forward, it’s imperative that you don’t get locked in to the “that’s the way we’ve been doing things for years” mindset. You have to take a fresh (critical) look at every aspect of your business. Question not only what you’re doing, but also why it’s being done at all. Every decision must be made with only one thing in mind – cash flow.
Regardless of your political affiliation or whether you’re in favor of any of the new administration’s policies, changes are underway. Everything from healthcare to energy to the financial system and the taxes required to pay the bill will change the rules. Long-standing needs and operating conditions must be reevaluated constantly. You must be willing to abandon old ways of thinking and hone your skills in change management. Do not get locked in to any particular approach with the hope that revenue will rebound or cost will come down. Leave no rock unturned and do it now. The longer you wait the deeper you’ll have to cut.
Some areas to evaluate are:
- Accounts receivable management
- Inventory mix and management systems
- Fixed asset policies, equipment needs and maintenance requirements
- Bank relationships and financing needs
- Sales and marketing activities
- Pricing and margin management
- Staff utilization and compensation systems
- Production systems and processes
- Purchasing and supply chain efficiencies
- Travel and promotional activities
Market dynamics have been altered dramatically which will in turn put pressure on revenues and affect nearly every product or service you buy. The confluence of these events makes the current environment very fluid and eminently perilous. There are few businesses that will be unaffected. A “weather the storm” mentality will not work this time.
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