I just read an article in the Danish Business newspaper Borsen about what companies could do to survive the crisis. And it strikes me again, that many companies forget to give their company a regular overhaul and only do this when the life of the company may be at risk. Imagine how much better most companies could do during good times if there was an equal amount of focus on doing what is good for the company as we see during down-turns. That being said, it is a good advice to do this overhaul now, especially as it seem 2012 may be a tumultuous year, and that many business leaders do not see the crisis being over for a couple of years. That a number of European countries have been downgraded and that the eurozone is in crisis does not help.
What are these good advice? Financially you should ensure that cash-flow is sound and that you keep a tight control on the finances. A good advice here could be to apply Activity Based Costing to assess which customers or products you actually make money on and which drain your cash. Then you should adjust your strategy accordingly to boost your top line and your bottom line. Remove unnecessary cost and delay non-critical investments. If you have volatile expenses in raw materials or currencies, where exchange rate change more these days than you are used to, make sure to hedge or otherwise spread your risk. Even slimming your work force could be an option if you have staff that do not contribute due to lack of orders.
Since the world is harder to predict than usually and there is a higher probability for risk of surprise, you should keep your eyes open and be agile. Be ready to change with short notice when the environment changes. Also, the owners and creditors are less risk taking and expect to be briefed and consulted before larger changes take place.
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Soren Helsted's Blog 