Tips for Surviving an Economic Slowdown, Part 2

March 20, 2003

From Kirk Alter of Purdue University and Fast Management,Inc., Director of the PHCC Educational Foundation's Managing PHC Projects Course

We’re all having a tough time figuring out what the economy is going to do. Here are some more thoughts on how to manage your firm during uncertain times:

Make smart pricing decisions – don’t buy work! Instead, spend your time examining the best ways to reduce your costs and improving your customer service. If you can prove you are consistently the best at what you do, people will be willing to pay more for your services.

Get extremely serious about your cash flow – both customers & suppliers are going to have problems …beware! Paying interest on a loan needed to cover your everyday expenses costs more than smart planning.

Get rid of your inventories. Find a dependable supplier and arrange for them to guarantee the items you use most often will be in stock and delivered only when you need them. In return, make that supplier your exclusive source for those items.

Get up to speed on electronic sourcing and billing. Reducing transaction costs will help both you and your supplier.

Stick to your knitting and don’t try to be predict the future. Your focus should always be on getting and building profitable work, above all else.

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