Congress adjourned for the holiday weekend without deciding on Medicare Physician Payments legislation, which means that as of June 1, 2010, physicians will be taking a 21.3% pay cut for each Medicare patient they treat. Would you be able to take that kind of hit in your business?
We are now seeing some improvement from the recession, but what lessons have business owners learned from this experience? First and foremost you should have learned that rather than waiting until hard times and increased stress to determine viability plans, you should make them when you can be objective. As we begin a new month, spend some time strategically thinking about an action plan that you can consult when times are tough. In your thinking, consider the following questions:
1) How much of your annual budget is actually set aside for down times? Many business people don’t have this designated fund. How long could your business survive if you didn’t have any incoming revenue or your revenue was drastically reduced?
2) What guidelines would you use to do a reduction in force? It is much easier to develop these guidelines without duress than it is to wait for the time to come that is emotionally trying.
3) How would your marketing strategy be different during lean times? Many business owners are great about networking for business during lean times but don’t continue those relationship funnels during good times. Having a defined and consistent marketing plan can help alleviate some stressful times without the emotional response to a downturn in business.
4) What are your weaknesses during the good times? As part of any strategic planning exercise, I always help my clients identify their strengths and weaknesses. I suggest businesses review their plan monthly. Having a plan that addresses strengths and weaknesses during good times can build a strong foundation of resolutions to either strengthen the weaknesses or at least know how to minimize them during lean times. Being proactive promotes objectivity.
5) How will your clients’ needs change during a downturn of the economy? Retail services have been hit hard by consumers learning to live without some things during lean times. What can you offer that consumers will continue to use or budget for to minimize the impact? Will your customers change during a downturn?
6) Who are your advisors during the good times and the bad times? Being objective means that you can rely on the viewpoint of this team regardless of the business climate. Do you need to have different advisors during downturns? What information will they need to have so they can give you valuable, realistic feedback? Do you need to have management consultants in your plan that you have already identified and for whom you have completed reference checks? Being proactive means you know who is in your corner during good times and bad ones.
7) What will be your hours of operation? During downturns is it possible to revise the hours of operation to accommodate your budget or clientele? Making this decision without emotion will provide objectivity.
8) Who do you know that can offer financial resources, if necessary? Waiting until you need the money to help you through tough times limits your decision making and options. Will you be able to identify a banker or an investor during lean times? Develop these relationships now. Would you be able to qualify for a grant?
9) Does your staff need additional skills to accommodate the changes or for cross-training? Don’t wait until a crisis occurs to determine what your staff needs. They will need a leader that can be decisive even under stress.
10) What services can be eliminated temporarily to weather the economic impact?
Spending time monthly strategically thinking through your business allows intentional and deliberate decision making. You can be proactive and prepared for lean times. You will have empowered yourself and your business by being objective now for future downturns. Any business can go through a slump. It happens. Are you prepared?