14 Things Smart Leaders Should Do

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When the economic situation deteriorates, it is necessary to actively address the challenges. After all, it is easy to be a good leader in times of peace. The real test comes when times are tough, like right now. Now, the dreamers among us are pursuing a dual strategy. On the one hand, they rely on internal efforts to sustain their business; on the other hand, they look outward to seize the various opportunities created by the economic downturn. If you haven’t done this yet, here are some important steps you should take. 1: Implement internal improvements and monitor cash flow. Cash is king, and that’s even more true these days. Make sure your credit limit is sufficient, and pay close attention to your cash flow. If you are short of working capital, address it through cash flow (rather than items on the income statement). Closely monitor cash flow data and be ready to act. II: Assess strengths and weaknesses. Know yourself. If you know there are any issues with your business, fix them now. These defects may cause you losses. Similarly, in seeking new ways to leverage your strengths, you need them more than ever. Three: Reconsider the sales strategy. Identify the most profitable products or services, and focus sales efforts accordingly on those areas. Use gross margin as a metric, or return on investment. IV: Classify customers. Determine which customers are profitable and which are not. If some customers are consuming resources, either raise the price for them or stop working with them. You can’t afford long-term non-profit customers; you need to \"downsize\" your customer base now. 5: Improve work processes. If there are additional costs in the engineering process, identify them so that the business can operate as efficiently as possible. Perhaps you could use an evaluation system similar to “total quality management”. Six: Increase throughput. In a weak market, customers often purchase in small quantities. Don’t turn down small orders; find a way to adapt to this situation. If you can respond in a timely manner without making major changes to the workflow, then do it – it will pay off. 7: Increase marketing efforts. What is the first thing many companies do in order to cut costs? It’s precisely the worst thing to do: cutting marketing expenses. Research shows that companies that maintain (or intensify) their marketing efforts during economic downturns reap greater returns in the future. Additionally, marketing companies are currently facing a shortage of business, so you can get better prices. 8: Reexamine the compensation system. Now you need to make the most of your employees. If it has not yet reached its maximum level, start implementing performance evaluations and link salaries to performance. Think creatively: is it possible to increase results-based bonuses while reducing the basic salary? Keep in mind that, for most small businesses, salaries represent the largest cost expense. 9: Seek external opportunities and establish strategic alliances. Forming simple partnerships can save you money. Consider group purchasing, sharing rent, and equipment sharing as ways to reduce cost expenses. Another idea is: Do the manufacturer’s sales representatives and export agents have the capability to help you boost sales? 10: Negotiate with suppliers to reduce costs. Taking rent as an example, if the rent is due in the coming years, then a longer-term lease agreement should be proposed on the condition of price concessions. Or if you pay your suppliers quickly, use that as a condition to obtain price discounts and additional benefits. Eleven: Target competitors’ customers. If your competitor is facing difficulties, go and win over his key clients. If these customers feel that the quality of the original product has declined or are worried about service interruptions, they might be willing to turn to you. Twelve: The better option is to acquire competitors. If you have the means to acquire underperforming competitors, you might want to consider it, provided that such an acquisition serves to advance your own strategic goals. Thirteen: Update the workforce. Many talented people are looking for jobs now. If you keep using mediocre employees, remember that they are holding back your business. If you can’t get their performance up to standard, then take tough action to make some changes. Fourteen: Stay attentive to external changes at all times. Pay attention to fresh ideas and opportunities. Stay up to date with news and trends. Exchange ideas with other entrepreneurs to see what they are doing. Learn and draw lessons from what happens around you, and be ready to seize opportunities when they come your way. (Reposted by hydraulic English journalist DouDou)