Surviving A Global Depression – 12 Key Steps To Keeping Your Business Alive
If saving or sustaining your business is one of your top priorities (above running away to the country) you will need to implement a depression-ready plan for your business. This is a multiple-step process. The first step is to ensure the safety and continuity of your business.
Don’t leave your capital in the bank. Bury boxes full of cash under your house if you have to, but don’t trust any electronic systems with your business’ lifeblood. Safeguard your data and records. Make a full backup of absolutely everything on separate hard drives and take them out of the building. Keep them safe at home, never in a bank safety-deposit box. Remember, your bank might not be around in a few months. Stop accepting credit, debit cards and checks. You may not get the money.
If you’re in a rarefied upper-echelon business, such as Rolex or Rolls-Royce sales, consider switching to staples for the duration of the depression. Keep in mind that there will be precious little demand for $25,000 wristwatches but overwhelming demand for ramen noodles. If you are one of those businesspeople who would sell bottled water for $100 in flooded New Orleans and can bear the foray into repugnant, macabre opportunism, these items should be in incredible demand: batteries, bleach, bottled water, camp stoves, candles, dried, canned and jarred food, electric generators, first aid kits, fuel of any kind, heat pads, stay-dry matches, survivalist and camping gear, water filters and purifiers, and windup radios.
However, if you have spare funds I very much urge you to take it upon yourself to distribute as much of this stock as possible where needed for free. You will get good media coverage, and people will remember your company’s good will when the depression is finally over.
Here are twelve key steps to ensuring that your business will not only survive the global depression, but may even thrive through it!
- Improve your efficiencies. If you have internal waste, now is the time to trim it, however not by decreasing your margins. There is a limit to how far you can cut costs. The key is to become more efficient doing what you're doing now.
- Renegotiate everything. In a depression there is no element which is not on the table, so no matter what contract, deal, or arrangement you have in any aspect of your business it's now time to revisit it to see if the terms and conditions can be turned to your greater advantage.
- Increase your automation. It may cost a bit more upfront than you're comfortable in investing at a time like this, but if it's even remotely affordable, it will definitely pay dividends. Keep in mind that your equipment suppliers are also starving for cash and may be very motivated to make you a great deal on the automation machinery you require.
- Sort out the wheat from the chaff. It may seem heartless, but your business has to survive, so identify and keep all your A team players and jettison the rest. It's Darwinian, but that's the way to keep your head above water in a depression.
- Outsource everything you can. A General Motors assembly line worker gets paid $75 an hour when the legacy, pension and benefits are tallied up. His Chinese counterpart is lucky to get one tenth as much. Mexico, India, China... if you can move as many of your operations as possible to these countries, do it now.
- Lead by example. Don't cut your workers' pay, eliminate their benefits and liquidate their pension plan and show up the next day in your chauffeured limo. See how well auto execs flying to Washington in private jets to beg for billions worked for them?
- In God We Trust, Others Pay Cash. Extend credit only to octogenarians accompanied by their grandparents. However, your own accounts payable should be stretched out literally to the breaking point.
- Become a raider. Your competitors are in as much, if not more, trouble than you are. They might be willing to sell out for pennies on the dollar, or in some cases, even just for taking over their outstanding debt.
- Export. Some countries will fare better in a depression than others. Identify these markets and go after them mercilessly.
- Ditch luxury. Now is the time to lop off your entire high end segment. Go as down market as you possibly can, stressing that your product or service is the most cost-effective in the marketplace, if not outright the least expensive to obtain!
- Concentrate on a few core offerings. Is it possible to chop down your entire voluminous line to just a few items or services which are needed the most by your cash-squeezed customers?
- Be honest. A depression is no time for hype. Clearly and vividly explain to your customers why they need your business. Let them understand that you're all in this together and you can help each other out.