What to do in a plunging market.

There are a number of strategies which can work to insulate you from potential disaster.

This downturn of business could come from a down-turned economy or depressed market sector, or from whatever influence or pressure it may be that is reducing the demand for the product or service you are currently producing or offering.

The most important point of all is to do something, anything is better then nothing, indecision is the killer.

So consider the following:

1. Get out quickly and apply your energies to a new endeavor. Sell equipment, collect receivables, perform workouts on debt and reduce overhead simultaneously as you create transitional cash.

The biggest mistake one can make in this situation is once it becomes clear that an exit strategy is required, delay, allowing  indecision to set in eroding more capital every day.

Once you make this decision, pull the trigger as rapidly as possible, let go of your employees, stop paying bills until you evaluate your final position, and do whatever is necessary to end the cash flow out  and change your situation.

2. Market harder and smarter, spend more if possible, as your competition is probably hiding under a rock, waiting for the storm to pass. Even if the market is depressed you need to capture as large a percentage of the current demand as possible and marketing is the way, especially in view of your competition slowing their marketing efforts down.

3. Broaden your target market with expanded marketing efforts. This could be geographically or by expanding your target group.

4. Consider adjusting your current marketing methods and plan, such as creating your own wholesale distributorship, or marketing direct to the business or consumer via Internet, telemarketing and direct mail, opening stores, or creating a representative sales business using brokers.

5. Cut overhead drastically and immediately, as deeply as possible, conserve cash and make operations profitable under existing demand and conditions. Reduce payroll and build in incentives wherever possible.

6. Re-negotiate lease, or threaten to close or break it anyways, under the pressure of the economy.

7. Change methods of business, ordering just in time or against specific orders. Inventory is a huge investment of cash and thus carries great risk and cost.

8. Expand services or products to replace lost revenue. Create a less expensive option and maybe provide financing if appropriate.

9. Exploit a specialty unique to your own business. Be the best in something and tell your market, capturing whatever additional business you can.

10. Buy out weaker competitors who do not have the desire or ability to weather out the storm. You should be able to buy low and pick up assets with favorable seller financing. Expand in the face of a down turn, why not?

By removing duplication and cutting overhead while expanding the revenue base, it may just be a huge  turnround opportunity for the last man standing.

11. Reduce prices to maintain cash flow and beat out competition.

12. Expand incentive based sales representation create an outside sales program.

13. Create proprietary products and services, greater margins, harder to compete with.

14. Get creative, find an advantage, exploit it and gain ground.

Every market has opportunities, if we only look hard enough and plan effectively.

Indecision can be fatal, making no changes is self destructive.

Respond to the changing market conditions and live to talk about it, fail to respond and like the dinosaurs, become extinct. Call me for help 413-549-2966.