MIKEL, Inc.
Be proactive in addressing the following areas:

u Solve the Cash Crisis
u Get Control of Your Finances and Look at Your Costs
u Improve Efficiencies
u Refocus on the Market and Initiate Low Cost Marketing Programs
u Address Personal and Personnel Issues
u Strengthen Your Business Relationships
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Small Business Tips
for Surviving and Thriving in an Economic Downturn
Solve Any Immediate  Cash Crisis

r  Organize financial data in one place
r  Make a list of the problem areas
r  Set priorities for collections and payables
r  Determine next day's tasks each night
r  Set time frame and goals for cash management
r  Contact the local SBDC for assistance


Collect Accounts Receivable

r  Bill customers as soon as possible
r  Use aging reports to manage and project cash flow
r  Collect everything now
  m  Call everyone -- Don't wait
  m  Begin collection for overdue accounts approaching 90 days
  m  Pick up large checks in person, if possible
  m  What to say?  Contact the SBDC for specific suggestions
r  Set firm credit policies
  m  Require cash payment at time of service
  m  Make all invoices due within 30 days
  m  Send collection letters at 30/45/60 days
  m  Place overdue accounts on COD


Contact Creditors

r  Prioritize who to pay first -- for example, IRS, bank, landlord
r  Complete a cash flow forecast before setting a payment plan
r  Talk to decision makers and keep in constant touch
r  Offer partial payments, if possible
r  Keep payment promises
r  Contact the SBDC for help with projections and
      negotiation strategies
r  Lenders
  m  Renegotiate existing loan terms
  m  Consolidate debt
  m  Request interest only payments
r  Past due taxes
  m  Contact all agencies immediately
  m  Respond to tax collection letter promptly
  m  Complete cash flow forecast before agreeing to a payment schedule


Adjust Prices and Reduce Costs

r  Be competitive in pricing and value
r  Revise pricing to improve sales and profits
r  Charge extra for emergencies, deliveries and other value-added services
r  Eliminate discounts and giveaways
r  Ask landlord for rent reduction or restructure to allow a short abatement period
r  Rent out unused space
r  Reduce personnel expenses -- for example, hire part-time, use interns, eliminate
      overtime
r  Ask vendors / suppliers for trade discounts
r  Reduce personal expenditures -- for example, travel, entertainment
r  Sell unproductive assets


Manage Inventory

r  Review inventory levels every month
r  Liquidate everything that has been on the shelves over 90 days
r  Sell outdated items at cost, if necessary
r  Restock shelves with faster-selling items
r  Buy using "Just-In-Time" ordering processes, if possible


Require Accurate And Timely Accounting

r  Create and interpret financial statements
r  Get involved -- bookkeepers and accountants can't do it all for you
r  Review financial statements regularly to make timely management decisions
r  Forecast short term cash flow
r  Contact the SBDC for assistance


Establish Checks and Balances

r  Implement financial controls
r  Enforce cash handling policies
r  Review fiancial reports every month
r  Reconcile daily register close-out with bank deposits
      and credit card transmittals
r  Prevent opportunities for embezzlement
  m  Divide financial rsponsibilities and functions
  m  Require checks to have two signatures, if possible
  m  Limit check endorsements to the owner
  m  Examine payroll records for accuracy


Focus on Marketing

r  Redefine the core target market and think about a "niche focus"
r  Look for complementary areas requiring minimum start-up capital
r  Reassess your marketing strategy
r  Continue to invest marketing dollars
  m  Understand that carefully invested marketing dollars and active business
           promotion will only generate more sales
r  Keep in touch with current and past customers
  m  Thank them for their business
  m  Suggest another specific product or service
  m  Ask for referrals
  m  Repackage services to accommodate smaller clients and reduced budgets
r  Examine the best and least costly way to contact customers
r  Find the "hook" that will trigger a response
r  Watch for new trends and look for opportunities to provide solutions
     (These are only interim steps -- not the marketing plan)


Pay Attention to Your Retail Image

r  Appearance counts -- clean it and paint it
r  Keep window displays fresh
r  Add lighting to highlight product displays
r  Clean or install new carpet
r  Remerchandise products and shelving
r  Install attractive and descriptive signage
r  Train employees to deliver top notch customer service


Set Critical Business Policies

r  Decide on behavior that is essential for business success
r  Set policies for customers and suppliers that will contribute to your success
r  Set policies for employee behavior that meet customer expectations
r  Hold everyone accountable


Be an Effective Business Owner

r  Refine your business skills
r  Attend workshops in subject areas where you need
      support
r  Invest time in solving problems
r  Make a commitment to improve
r  Practice what you preach
r  Communicate with customers, employees and suppliers
r  Talk with other business owners -- you are not alone
r  Contact an SBDC business counselor -- (it's free)

_______________________

Acknowledgements: The information for this page was developed by John W. Parker, Jr., Business Analyst at the Alexandria, Virginia SBDC. This material has also been published by the Virgina SBDC Network and the South-West Texas Border SBDC Network. Our thanks to John W. Parker, Jr., and to the Virginia SBDC network and the South-West Texas Border SBDC Network.

Your local SBDC is available to help you: This material is intended to be an easy-to-review checklist with suggestions for surviving an economic downturn. Implementing any of these recommendations requires careful thought and planning. The counselors and staff of your local Small Business Development Center (SBDC) are available to help you individually with any of the recommended steps.

To locate your nearest SBDC, search by your Zip Code or state, below:
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