I’m hearing so much conflicting advice on how to weather this recessionary storm that I’m confused! Some say I should take advantage of the opportunities and expand while others say I should cut back and consolidate my operations! What’s your take?

Despite the challenging times that we’re facing, there are many opportunities if you choose to look for them. It’s all about perspective. Avoid allowing yourself to focus on the negative messages you hear from others; instead, concentrate on your mission and passion. I’ve included four solid suggestions that can help you decide what’s best for your business. Remember, it’s your business and you decide what’s best for you. Good luck!

This is a great opportunity to reflect and determine your core business strategy. Ask yourself, “Have I stayed on course or veered off in too many directions?” Many companies have tried to do too much instead of focusing on what it is they do best and improve on what makes them most profitable. This is also a good time to look at your current spending habits. Eliminate discretionary spending that doesn’t benefit your top or bottom line. Quite simply, “Get Back to Basics”. This means taking a realistic look at your financials so you’re certain your expenditures support your overall business objectives - today. You may be surprised with what you find.

One of my clients was experiencing significant success and so they decided to expand their operation. They leased more space, bought new equipment, and hired additional resources. This was a good strategy based on their growth trend and expected results. Unfortunately, they experienced a decrease in revenue because some contracts didn’t materialize, leaving them in a difficult situation. But this presented an opportunity! I asked them to examine their spending habits.

What they realized is that they were paying for specialty gourmet coffee and treats for their employees that weren’t even being consumed because they preferred the coffee from the local coffee shop. In addition, they were spending exorbitant amounts of money on a “Cadillac” photocopier that did much more than they required. Most of the staff didn’t even know how to use all the features! Further discretionary spending cuts resulted in reclaiming over five thousand dollars a month in cash flow!

Anticipate problems and keep focused on the market and your results before problems occur. Many companies can get complacent with their service and product offerings. Now is the time to ensure your company’s focus is on deepening existing relationships with customers.

Your existing customers are no doubt experiencing similar issues and may have their own challenges that you can assist them with if you stay alert to what they need. This may mean that you have to refine your products or services, to more appropriately assist them.

For example, a business owner who decided to follow this strategy met with his client and spent time listening to the challenges he was facing. He learned his client’s project was basically on hold because he was mandated to make employment cuts. The work was still there but the company’s head count had to be reduced by 10%. Staying alert and having a solution mindset, the business owner recommended implanting one of his employees to perform the tasks that were required. Over time, he was able to hire six new employees to implant, generating additional revenue for himself while simultaneously solving his client’s problem.

Have you heard the expression, “Cash is King”? Well now is the time to refocus your mindset to find hidden cash in your business. For example, due to the rising costs of material and transportation, it may make sense to reduce your inventory to further reduce overhead costs and help your immediate cash flow. Speaking with your suppliers to renegotiate payment terms to extend your invoice payments or to stage payments can help your short term cash flow needs. Negotiate and take advantage of discounts available through payments such as early payments or deposits.

The strategy that is most beneficial to you is based on your individual situation. Going through this process of refocusing can help strengthen your cash management strategies ensuring that your cash is working for you. There may also be programs or incentives that as a business owner you can leverage. Look for opportunities to recover some of your expenses through government funded innovation programs. It’s worth exploring as the money recovered can be reinvested in your company. By having a cash flow mindset you will discover what opportunities may exist in your business.

Although it’s wise to take the time to closely examine your business and strategically consolidate, you don’t want to just focus on cutting costs. It’s important to consider your greatest assets, your employees, when making your decisions. In cutting back on staff you need to weigh off the opportunity cost; that the employees that remain may begin to operate in fear and become less productive. If time is spent on worrying about what cuts come next instead of what their employer wants of them, efficiency is lost. It becomes a downward spiral.

Taking a more systematic look at your business and making cuts that makes sense is advisable. How can you do this effectively? One way is to consider the use of advisors. Closely examine your advisor’s track record of success and ensure that your compensation model will force you to be clear about your own expectations along with targeted milestones. The different perspective and network that advisors bring to the table can make all the difference in your business so don’t be afraid to spend money; just spend it wisely. It takes money to make money and having a balanced view and a performance contract helps you get the best of both worlds. –New fresh ideas and opportunities with minimal costs.