In a prolonged recession, what is the best strategy for business survival?

There is no magic formula, but the following 10 points will maximise your chances of business survival.

1. Believe in cycles – this too will pass, so plan accordingly.

2. Cash is king – tighten up on your slow payers and cash up your slow or dead stock. Take the hit and get rid of any unused assets.

3. Look around for better suppliers as regards both price and terms. The pencil sharpeners are out everywhere.

4. Do some “worst scenario” planning. What if your sales halved? How would you cope?. Think ahead and be prepared.

5. Use the slow time to upskill yourself and your staff – and also to upgrade and tighten your systems. Plan for the upturn.

6. Question everything you do, and every cent you spend. Can it be eliminated or done better?

7. Scan the marketplace for new segments, new opportunities. Be prepared to adapt or extend your products/services and pricing. Spending patterns change in tough times.

8. Adopt a low risk profile. Avoid entering into new financial commitments such as leases, hire purchase etc., unless there are clear benefits.

9. Stay positive! You are what you think you are.

10. Get yourself a business mentor (www.businessmentor.org.nz). Two heads are better than one!