I was not surprised to hear that online Christmas sales were up by 16% in 2011… I get the distinct feeling that the sun is setting on the “Great Recession” and a better day is just ahead.
So today I’m going to share my 4 keys to preparing for the thaw, and then I’m going to ask you to give me your tips.
As you think about that, here are my 4 keys to being better prepared for the good times that I think are dead ahead:
1. Focus on Cash: Do you really know where the cash is in your business? There are so many inefficiencies in what is called the “cash cycle” – all the steps involved from the moment you collect cash, bank it, spend it, earn it, bill for it, and collect it again. Each step holds an opportunity to improve your cash position.
Accounts receivable is a big one – lots of customers slowed their payments down over the last few years. Use the next few months to get everyone current. Then have frank discussions with people about staying current. Consider offering small discounts for faster payment. Accepting credit cards or online payments is, of course, another way to speed payments while making it easier on customers who could still be wincing from the recession. Consider a tool like PayPal that makes accepting credit cards and offering instant online payments a lot easier.
2. Amp up Your Credit: I believe that a lot of spending has been “bottled up” in both consumers and businesses. You should be getting ready to run as fast as you can to keep up with demand when things get moving. Having a little extra credit available can help you really put the pedal to the metal when the economy improves.
But don’t wait until it’s too late. Line up extra working capital now – when you don’t need it – so it will be available when you do. As your company grows, so should your ability to borrow. If you haven’t looked for more credit lately, now’s the time.
3. Review Last Year’s Cost Cutting: Over the last year or two you’ve had to buckle down, but you may soon need some of those resources that you axed. If you aren’t quite ready to re-hire employees or buy new machinery, consider outsourcing. Both local and off-shore vendors may be able to help you ramp-up without adding large costs. And if you’ve made cuts to key budgets like marketing and promotion – now would be a good time to plan how to re-energize those efforts.
4. Focus on Your Strengths: You may have diversified during the recession – looking for any ship that wasn’t sinking. That’s a good strategy, but as we turn the corner it may be time to really focus on the one ship that will take you the furthest the fastest. Since many of your competitors have shut their doors in the last few years, now is the time to establish your dominance and lock up the best customers in your industry. You can’t do that if you’re still searching the seas for new opportunities.
Let me leave you with one key thought. Now is not the time to pull into our shells and hide, but rather to prepare a more solid foundation for the rapid growth ahead.
Now it’s your turn. Please let me know what strategies and opportunities you are using to prepare for the next boom cycle (Or am I just crazy? You can tell me that too!)
Dedicated to your (Booming!) profits, David
PS: To take real advantage of 2012 growth opportunities, drop me a line and let’s chat! (Or click “subscribe” on the right so you don’t miss any FUSE updates. Its easy and free!)
Photo credit: Monterey Bay, Pacific Grove, California. Photo by David Worrell. Use with attribution please!