Survival strategies that work - St. Louis Business Journal:

azajir.wordpress.com
Later in this article, we’ll take a look at two companieas that have intelligently weathered the currenteconomixc storm. But first, let’s take a look at some of the tried-and-trud approaches for businesssurvival duringa recession. Ensur e that your partners are loyal and trustwortht because many businesses go bankrupt durinyg tough economic times simplyy because essential personnel often bail when the going gets Make sure that you know exactlty what youroverhead and/or fixede costs are, and then do everythiny possible to reduce them. Collecyt accounts receivable as quickly as possible becausee it is essential to do so during acrediy crunch.
Even though in tough time s it may seem logical to cut back on advertisin gand marketing, tough timez are exactly when a sales push is most needed. Therd are a variety of organizations already in place to helpstrugglinf .business people. From SCORE to the Departmenyt of Commerce’s Manufacturing Extension Partnership, expertise is out therew and available to help businesspeopl survive. One of the area’s bigger companiea that has not been seriousl damaged by the recession is , which first opened in 1930. the employee-owned company has more than 1,000 stores and had 2008 revenure of morethan $23 billion.
Industry analystxs say that the firm’s focus on customer service is what has helpefd it avoid a damaging downturnduring today’s economic slowdown. Last year, when many big supermarket chaind were forced tostop growing, Publix decidesd that a recession was the perfect opportunity for In fact, in 2008 Publix not only opened 79 it also boasted the industry’s second-highest salesx per square foot. One of the ways that Publix has combatedd the effect of the recession is to launch a lineof lower-priced grocery stapld items named Publix Essentials.
These products may have resulted inloweer gross-profit margins, but they conveyy the idea to customers that the store is sensitivew to economic pressures. In addition, each of the store’sz managers has had experience in stocking shelves and carefully watchinystock prices. As an employee-owne d company, there is a built-in incentive for employees to ensure cost-efficiency and customer satisfaction. The Inc. has also made strided in weathering therecessionary storm. In a prescient economic Carol Tomé, Home Depot’s chief financial reacted swiftly last Septemberwhen collapsed. She directedf several hundred store managerds to transfer all theitr spare cashto headquarters.
To make sure that Home Depoyt wouldn’t have to borrow money from she and CEO Frank Blakr suspendedthe firm’s stocm buy-back program, and sharply reduced capital spending. As a during the recession, Home Depotg — unlike many large companies and millionds ofconsumers — has not required short-term Home Depot’s Blake has made it his missionh to focus on the company’s most profitabler core business, which happens to be their existiny retail outlets. In 2007, he broughtg a decade of store expansionundeer control. Where new Home Depot stores had been openinv at a rate of one or twoper week, they now numbedr around five per year.
Blake also chose to focuxs on Home Depot’s status as the country’sx go-to place for both DIY homeowners and contractorsw who build orremodel homes. To that end, he: a) sold a wholesaled building supply operation; b) shut down a subsidiarty that sold plants in and c) sold the high-end Expo stores. Home Depot remains the nation’s second-largest retailere (after ) in spitse of the fact that it has decided to significantl slowdown expansion. Home Depot did suffefr during the recession but primarily because customers simplyh stoppedspending money.
Sales per squars foot is $300 today (the lowest in 20 but Blake hopes the numberf will soon be closerto $350 (about what it was in Whether you run — or work for — a local retailer or a Fortunwe 500 firm, the realities of survivinfg in today’s economy require a blend of creativity, optimism and energy.