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  1. Focus on Profitability not Growth. Many times we need to invest in order to grow our business. In a recession, you can only grow if it is profitable. If you can’t be profitable and grow at the same time, just be profitable. Growth needs to wait.
  2. Focus on Cash not Sales: I have also said “It’s Cash Flow, Stupid” and this is even truer now. Forget about the sales line on your profit and loss statement. Look at your cash flow statement. Focus on getting paid from your customers, extending your payments to vendors and keeping your inventory as low as possible.
  3. Draw on your bank credit line before the bank takes it away. Unless you have 6 months cash in the bank, draw on your credit line. The insurance will be worth the low interest paid.
  4. Challenge all of your business assumptions. This is no time for sacred cows. Can your business be done another way? Adapt of die. Cockroaches do this extremely well in bad times. How can you increase gross margin? How can you sell to your clients at a lower cost? What parts of your business make a profit? Which are the profitable customers? What are nice to haves and what are luxuries in your business? Take no prisoners.
  5. Ask your Clients to Substitute Your Products for Higher Cost Ones. Your product may now be the cheap alternative. In a recession, price trumps it all. Find out from your clients if your products can now be substituted for something they have been buying which is similar, and now a “good enough” less expensive replacement.
  6. Cut costs now even if revenue has not gone down. No owner has ever regretted cutting costs too soon. Don’t get caught in a death spiral. First, in deciding which ones to cut, use the “cringe factor”. Ask yourself, which checks do you “cringe” when you write them at the end of the month? Which payroll checks do you “cringe” when you sign them? If you do cringe, it means that you are not getting value out of these expenses and you need to either cut them or find another way (provider/ person) to offer those services.
  7. Stop Watching the Stock Market and your Portfolio. If you have checked it once with your financial advisor and it is okay for the next 5 years, leave it alone. There is nothing you can do.
  8. Remember Your Resiliency. Economic cycles come and go. You have been here before and survived. Cheer the good times with parties, awards and trophies. Mourn the bad times but then let go. Value action so you have more chances at success.