Economic recession! An everyday word on the lips of many. A global plague digging deep into the souls and hearts of many, putting both businesses and individuals at the mercy of forceful management.

While most businesses fold up and cease to exist during recessions, a handful don’t just witness breakthrough, sometimes they go as far as acquiring other businesses that are on the verge of folding up. Look at Nokia that was acquired by Microsoft and Motorola that was acquired by Lenovo. Now it doesn’t mean that the owners of the thriving businesses have super minds, they are simply principled and have laid down plans that guide their businesses.

1. Revisit your business plan:

Way back during my university days, precisely in my finals, I had a lecturer who handled a crucial GS course for us then called Entrepreneurial Studies. This course was all about creating businesses after school, so as to prevent the constant submission of CVs by us; his prospective graduates. We were to write a business plan as our final assessment for the semester. It was there and then it dawned on me that a business plan was the BIBLE & QUARAN of every business.Today many businesses erupt without a business plan, which is a trait commonly found in those set of businesses that fold up during economic recessions. From online stores, ICT firms, Logistics companies and Multinational Companies, a business plan is a basic foundation of any establishment. In fact, it is the first step to starting a business. A business plan is not just a document filled with a charts and financial figures, it is the light in the arms of every business that is going through the dark tunnel. It could be very much possible that, you are doing something wrong or outside your business plan. Revisiting your business plan, will actually get your eyes opened to the things you may have been doing wrong. It could also make you add a contingency plan or what I refer to as PLAN C to what you may already have. I call it PLAN C because, a properly structured business plan, must have a PLAN B. More on this later. Revisit your business plan today and save yourself the headache of extra thoughts during the rainy days.



2. Have a plan B from the start:

Borrowing a few lines from the first point which is the revisiting of a company’s business plan, a very important section of the business plan is actually called CONTINGENCY PLAN, which simply means having an alternative or a plan B just in case your primary plan disappoints you in the long run of your business. If you are in the manufacturing sector for instance, your business plan should actually have a PLAN B when it comes to sourcing for raw materials, logistics as well as the source of powering up the machines in the factory. A business without a plan B is like a family of 10, where the family relies only on the income of dad, who sells used clothes. Looking at such family, without the mother working to support the father’s peanut income, the children will be subjected to hunger, constant sicknesses, lack of education and the rest. But when the mother supports the family with her own financial input, the family will have an alternative means to feed any day dad doesn’t make reasonable sells or any sells at all. Every business should have an alternative plan from the very beginning, in fact, if you intend getting start up loans from financial institutions, the most section to be looked at is your contingency plan. Imagine a situation whereby a solar energy plant, which has the sole duties of providing power to a particular location; say an industrial location. Now this solar plant imports the solar panels, puts them together and sets them up to receive sun light or solar energy, so as to be able to power the industries it signed up power contracts with. Considering the fact that inflation has hit every economy of the world, to import solar panels for an increase in power, may cost as much as four times the initial price. This will actually cause a heavy increase in the cost of their services which may lead to industries, looking for an alternative and cheaper means to have power. If this solar plant had no business plan during its start-up, it wouldn’t just lose customers, it will have to downsize its staff, record a lot of loses, be forced to seek for loans and may even end up closing down. But look at a company that had a professional business plan, they may have alternatives like looking for a cheaper supplier of the raw materials, partner with other companies in the business or may even decide to save cost by getting a supply of silica sand; which of course is the basic raw material for solar panels, get experienced chemists and physicists, to commence manufacture of these raw materials locally.

3. Encourage existing debtors to pay up:

Having debtors is bad for business, this is because it involves cash flow. Cash flow is actually the bedrock of every business. Joking with it is like, unplugging the oxygen mask of a patient who is virtually dying. You need to gain a strong control of the cash in your business and letting debts linger in your business can be killing. We all know there must be credit facilities in your business that will make more customers to patronize the business. But do not give a killing or uncomfortable credit facility that will send your business to the bottom of the sea. As a starting entrepreneur, you need to actually prevent having debts in your business by having a persuasive means of making your clients pay you what they owe you. You need to work closely with your customers, to make sure you provide them the right credit facilities as well as working with them to make sure they fulfill their own end of the bargain. This will make sure your cash flow will be able to sustain your business. Bill Gates and Aliko Dangote refer to business as “a game of numbers”. So know your numbers and don’t gamble with them.

Source:www.nohitch.com

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