If I had Only Known

I've been offline for a couple of weeks. Busy with projects and a big party for the 4th of July.

While we're all scratching our heads trying to figure out when this mess will end, I find myself thinking "what if we had seen it coming and had been better prepared?" Here's a few things I think we should have done sooner rather than later.

1) Pay more attention to long terms "given" costs. Look through the long term supplier contracts, renegotiate lease rates, and review service providers. Then again, there is an opportunity now to take advantage of the tough times and leverage lower prices for the long term to help us come out of this mess.

2) Go after weaker competition. We all have a tendency to take for granted that a competitor's account is the competitor's account. I hate to say it, but by all means kick the competitor when they're down. Market to their core base. It's not like there's a lot of "new business" out there in the market. The only way to grow business is to take it from the other guy.

3) Talk to the Bank and the Board. Optimize cash flow and liquidity. There will be companies that make it through by the skin of their teeth, and there will be acquisition opportunities at bargain basement prices. Know your market and your competition though - if you can get their business for free (#2 above) there's no reason to buy them out.

4) Don't spend when you don't need to. We all do it - we stretch out spending to fill the available budget with a "use it or lose it mentality". Customer events don't need to be pricey to build business. Instead of hosting a golf outing for 100, invite the key players of core customers in for a private lunch and tour of the facilities. Once account, once a week or so. Don't make it a dog and pony show - find out what their needs are and how we might be able to help. Employee events don't need to be over the top either. I worked for a company once upon a time that flew all of their sales people out to California once per quarter for three days of meetings at the corporate offices. Dinner and drinks out in the evening, and a "fun day" at the end to wrap it up. Total cost per employee was over $3500 a head. Insane. Oddly enough they nearly went out of business for a lack of profitability right about the beginning of this recession. Go figure.

5) Focus on Talent. I had a rant a month or so ago about branding as it relates to talent acquisition and retention, so I won't get into that again (at least not today). Hindsight being what it is, people were let go due to short tenures that were probably a better fit for the company in the long run than some of the employees that were kept on. Besides just using performance reviews look at ability to drive new business, generate gross profit or for operational folks to improve effectiveness and reduce operating costs. Anyone on the payrolls who isn't offering value to the bottom line should have been let go long ago. Don't take your top performers for granted, either. Whatever the state of the market there are always opportunities out there. You want their best option to be to stay with you. Also, it's always a good time to bring in the best, whether they are in the ranks of the laid off or working for the competition.

6) Optimize Optimize Optimize. I'm all for continuous improvement, kaizen, lean, and such but all too often we take for granted that it's not just about manufacturing. It's so much easier to go with the flow with a "if it ain't broke, don't fix it" approach. Improve administrative processes, cut out layers that don't add value, improve forecasting, reduce energy consumption, etc. We don't need to wait for a downturn to optimize profitability.

7) Go for the Gold and Cut the Crap. Review the customer base on a regular schedule, at least once per year or more often if possible. Don't just look at revenue and GP. Look at average days to pay, overhead requirements, administrative processes, freight and delivery costs, average order value and cost per order. The most profitable accounts will not necessarily be the highest revenue generating. More of than not there will also be customers that cost more to support than they bring in. Determine which customers are bringing in the most "gold" and stop pouring efforts and resources into crap accounts.

8) Maintain a Needs List. Plan ahead. If you know you're going to need to expand the warehouse, improve plant lighting, add machinery, or upgrade the servers, it better to plan ahead. There are always deals to be had, especially in bad times when everyone is struggling to bring in business.

9) Keep a Smile on Your Face. Enough gloom and doom already. If you're always smiling people will wonder what you're up to.