Best practices recommended to your clients in anticipation of a recession was this month's discussion topic for a meeting for the networking group, Provisors, to which I belong.In attendance were approximately thirty five professionals who all serve businesses in the manufacturing and distribution sectors. My fellow attendees work for investment and commercial banks, law firms, insurance brokers, marketing consultants and operations consultants to name a few. Each works closely with top level executives at their clients.
Here are a few of their suggestions on how to get ready to ride out a recession - many you've previously read here on my blog.
- Diversify - don't get caught with too few customers or too few vendors.
- Forecast your cash flow, not just your sales or profits.
- Manage your working capital and keep a sharp eye on DSO, DPO and inventory turns.
- Inventory is your enemy - keep it lean!
- Develop a good relationship with your banker and share information regularly.
- Fire your bad customers!
- Develop a strong online presence to generate new sources of revenue.
- Don't forget to pay attention to your human resources - invest in training and make sure you have succession plans that are current.
Funny how the majority of the recommendations focused on things that a banker will look at most closely in determining if a company is "bankworthy".
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Tags : Provisors , PNG , cash flow , working capital
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