Downsize, Reinvent or Shut it Down

Downsize, Reinvent or Shut it Down Downsize, reinvent or shut it down? These are very difficult but very real propositions for many small business owners and managers throughout the country right now.  None of these propositions is comfortable.  Make the revenue cover overhead expenses and payroll. Not easy, especially when revenue is shrinking and forecasting your shrinking revenue is difficult at best.  Then what's this talk of a double dip recession?  What is a double dip recession anyway?  That's all we need is more bad news.  Then ......the waiting to get paid........the waiting to get paid is the worst.  Your employees, for some reason, don't like to wait to get paid.  For most companies these days, "forcing" profitability requires downsizing and reinventing your business. I use the term "forcing" because that's what describes what has to happen.  Forcing it. It's making it happen regardless of the pressure against it.  You need to make your business more productive and profitable by adjusting and changing your business equation.  Changing your business equation; "trimming the fat", "get more bang for the buck", "concentrate on core competencies", more emphasis on "sales and marketing", .........call it what you want, something has to change. All these options and more must be considered, and while challenging, can be tested first and simply with a pencil and paper (or more efficiently using Excel).  You can do experimental cash flows.  Ask yourself what will happen if you reduce payroll, subcontract, close locations, put performance objectives on managers and staff, put salespeople on commission, etc....  With downsizing and reinvention, it will likely mean changing how you do business. Some employees might have to go; others will have to be reassigned to new positions, a "changing of the guard" so to speak. A new structure that is more profitable, with fewer employees but doing the correct jobs. Yes, any business that is viable at its core can be made to operate profitably. Start with a pencil and paper (or Excel) and project the results of your changes. When you get the right mix of downsizing and reinvention, you will have your new, profitable business. Your reinvention will probably include making decisions that are emotionally charged, like laying off long-term employees who may feel like family. Unfortunately, you must make this difficult decision now or possibly lose the entire business later. It is hard, but necessary. I see the following problems with small business owners and managers that attempt to hang on to long: 1) Not acting quickly enough and losing money over time while waiting........waiting for things to go back to the way they were......while doing nothing about it. 2) Not downsizing deeply enough and carrying employees too long. Cut deeper, cut sooner. Save the rest. Chances are you can bring people back when things pick up again, if they pick up again. 3) Doing the same thing in the same way, not accepting the changes that are occurring and that an early response is necessary. It seems more so than ever these days that the key to success is to avoid having employees as much as possible. The only way to survive as a business owner or manager today is by keeping the expenses, including payroll, very low.   Since salaries and benefits are two major operating expenses for most businesses, a business that lays off people and/or contracts work out, when needed, to a supplier or independent contractors or part-time employees provided by temp agencies will have more money available for other business needs.  It's all about cash flow! CASH FLOW Most businesses fail first and foremost because of cash flow.  They might look good on paper but cash flow and the snowballing effect of poor cash flow crushes them before they can react effectively. If you can't pay your employees..... they tend not to show up for very long after that.  The electric company will only let you get so far behind before they shut you off.   Maybe a piece of needed equipment breaks down but you don't have the money to fix it, you can't do the work. Working with suppliers to help you manage your cash flow can help you get over temporary hurdles that may have otherwise trip you up.  Ask your suppliers if you can put them on a "paid when paid" basis.  Many suppliers, especially in these tough times, are willing to accommodate such requests. HELP Go through some of the exercises discussed above and implement them if they make sense to your organization.  In doing so you will not only survive, but you will likely prosper when things start to turn around. Don't do them, and you may not be around to find out. SampleServe.com can help you with your cash flow and reinventing process. We are willing, for qualified clients (clients that promise to pay) to go on a "paid when paid" basis.  That is you don't have to pay us until you get paid. This helps significantly with cash flow. Additionally, our costs to you are likely lower than your current overall costs for performing the same work.  This is going to help you in two ways.  1) Its going to make you more competitive by lowering your costs to your clients (if you choose) potentially bringing in more work; and 2) it's going to make you more profitable because it lowers your expenses while maintaining revenues.  Don't believe me.......put pencil to paper (or use Excel, it's faster).  :-)

About SampleServe.com SampleServe.com specializes in sampling environmental monitoring wells.  We charge a flat fee per sample, in most cases SampleServe.com is able to do the sampling for $65 - $95/well (exact quote will be based on total number of wells) Because we specialize in ground water sampling, we're good at it. In addition to the the well sampling we also have a unique web based reporting system that will save a substantial amount of money on reporting time and effort.  The subscription and use of our web based data management and reporting system is included free with the sampling of the monitoring wells. Call us or e-mail to learn more about our sampling services.