9 tips for managing a company through an economic downturn
This short article moves outside our usual theme of HR-related issues, but managing your company well has a huge impact on the people who work for you. Through all your actions you should bear in mind that it is the employees who, in the end. Keep the company moving forward.
- Cut costs where possible without compromising quality. Look for savings on non-essential spending, expenses, supplies, etc.
- Reduce payroll costs through a hiring freeze or reduced hours, but only consider furloughs or layoffs as a last resort.
- Improve efficiency. Review all your processes and roles then work to eliminate waste and redundancies.
- Increase cash flow. Try to tighten your customers’ credit terms, actively collect bills, and sell unused assets if needed.
- Focus on your core strengths and customers. Revenue generation should be the top priority through this period.
- Communicate openly with staff. Be transparent about challenges and goals to maintain trust and morale.
- Diversify revenue streams if the business allows. Seek new customers, markets, and product offerings.
- Maintain quality and service even if quantities decline. Protect the brand for when demand returns.
- Prepare for a quick recovery. Have strategies ready to ramp back up once business picks up again.
The goal is to weather the recession with minimal layoffs or losses by reducing fat, not muscle, through efficiency and austerity until normal demand resumes. Open communication keeps everyone aligned.