The Leading Edge - Fall 2008 - (Page 6)

cover continued from page 5 401(k) to help fund capital improvements. Many times the business owner doesn’t read the fine print of the agreements and ends up losing their home, life savings or both.” Instead of relying on consumer-type credit, Chalif says now is the time for any business to pay attention to their working lines of credit. And if they don’t have lines of credit, they need to think about setting one up even if they don’t need the money now. Too often, he says, companies start applying for credit lines when they need the money right away—whether to help the company survive or to take advantage of a sudden business opportunity. “Businesses have to always have available cash to absolutely have to,” says Yin Chang, president of Phoenix Marketing Communications. “This is where the majority of your dollars should be spent.” But she also advises evaluating and possibly changing the company’s structure. “Get rid of junior professionals and hire a professional administrator. You’ll find all your processes streamlined, costs reduced and a better quality of work,” Chang notes. Companies always make the mistake of hiring junior professionals because they are ‘inexpensive,’ they leave for better pay at some point. Hiring professional administrators will give you much more cost efficiencies in the long term, not to mention saving you major headaches, she says. “SIT DoWn WITh ThE STAff AnD TELL ThEM ThEIr joBS ArE SAfE If YoU CAn” —norM BroDSkY withstand a downturn,” Chalif says. “If you’re not prepared, you will not succeed.” However, businesses also must understand their credit options as well as the fine print. A secured line of credit enables the lender to put a lien on assets and could potentially lock the business from other lenders for a line of credit. If an unsecured line of credit is still available, it frees the company to make decisions in the future and not have to lock in with one lender, Chalif says. no reactionary price cuts Don’t cut your prices significantly just because your competition does. Price and service typically are the two areas where your business can distinguish itself. So if your competitors are instituting fuel surcharges, don’t institute a surcharge and use not charging as a selling point, Brodsky says. “You will be hurt by the increase in gas prices, but look at it in more of a long-range plan,” he says. Identify ways to absorb the surcharge and ultimately it can bring you more business. Consider offering stable pricing to new customers so they can budget appropriately for the next year or two and know you won’t be raising the charges. Customers will react positively and be more loyal when they can trust the businesses with which they work. Partner up Retailers cannot keep passing on price hikes to consumers, according to a report, “The 2008 Food Beverage and Products Industry Report: Achieving Superior Financial Performance in a Challenging Economy.” The report shares insight into how companies in that industry can prosper by harnessing the market forces that are killing some businesses now. However, the report, released by The Grocery Manufacturers Association and PricewaterhouseCoopers, offers insight that can work for many industries. Collaboration between manufacturers and retail partners is a must to achieve improved value and better balance higher costs. Retailers should press manufacturers to do more with price and to become more efficient by taking steps such as eliminating waste. Retailers also can share with manufacturers more information such as point-of-sale data. Within the collaborative environment, forget the shortterm or reactive approach. GMA and PricewaterhouseCoopers argue that the “patchwork” mentality doesn’t work well. Instead, optimize the product portfolio. By analyzing all the products, manufacturers can refocus on VOLUME 9 ISSUE 1 faLL 2008 teamwork mentality Get all your employees involved in a team effort to keep down expenses. Brodsky says his company won’t give out a new pen unless an employee turns in an old one. “We’ve never had an instance where someone didn’t have a pen to return,” he says. While he admits it sounds quirky, employees aren’t put off by it. The top seven employees have been with the company at least 30 years and the next 16 have been there at least 14 years, Brodsky notes. But more important than reducing expenses is to let your employees know where their jobs stand. “Sit down with the staff and tell them their jobs are safe if you can,” Brodsky says. “People get concerns about losing their jobs and lose their espirit de corps. Tell them they will not be let go because of the downturn.” He says employees will seek work elsewhere if they are uncertain about their future at the company—and most often the people who leave are the better people on the staff. “Don’t skimp on talent and cut back unless you 6 n n

Table of Contents Feed for the Digital Edition of The Leading Edge - Fall 2008

The Leading Edge - Fall 2008 Contents Sculpt Your Business to Survive and Thrive Protect Intellectual Property Outside the United States Complaints about Meetings? The Leading Edge Alliance Top 10 Misconceptions of Doing Business in Belgium In a Nutshell: Q&A

The Leading Edge - Fall 2008

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