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How would your business cope with a 20-30 percent drop in turnover? How do business owners deal with the wave of economic uncertainty that’s reported on everyday in the news, and decide what actions to take to survive and guide their business through (what we all hope will be) the inevitable upturn?

The best place to start is with your vision for the future. Picture in your mind’s eye how you want your business to look when the tough times are over and decide to take only the steps that fit in with this vision for the future.

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Cost Management is the hot topic right now. If you are going to embark on cost management it needs to be well thought out and planned. Slash and burn tactics in cost management can be more detrimental to the future of the business and may well be worse than doing nothing at all. 

Efficiency, not just savings 
Now is a great time to review processes in the business. Get your team together and ask those at the 'coal face' how you can do things more efficiently.  You may get a big surprise at some of the great ideas that come out. Ask staff for their ideas for how to reduce costs and increase customer satisfaction and reward the best performing ideas once implemented. Efficiencies should be measured not just by cost saving, but the impact they have on customers and other stakeholders in the business.

Example: A business that makes regular deliveries could offer less frequent deliveries in return for an incentive for lower pricing (ensuring this pricing is still profitable.)

It may be necessary to examine the fundamental business model i.e. what exactly does the business do, what is it's core activity and how does it achieve the outcome? Over time diversification can add complexity and not always improvement to the bottom line. There may be parts of the business you are keen to develop but they may not be contributing to profits. Decide if you should continue them.

Role of the Leader
Successful cost management needs to be driven by the leader of the business. The leader must demonstrate commitment and involve the whole team. Involving everyone helps give a sense of ownership and 'buy in' to the cost management exercise. The leader's job is to cut through politics to ensure roadblocks; myths and resistance to change are managed effectively.

Future Stability 
Focusing on future sustainability is the key to a successful cost management exercise.  If you can inspire a culture of efficiency you will create a very strong business to take advantage of the upturn. You could end up with a much stronger business than before the downturn. Look for one-off savings as well as long-term savings, as they may allow you to buy time to implement the overall plan.

Communication
Fostering an attitude of efficiency within the business requires communication. The plan needs to be communicated as well as reports on progress, and especially big wins.  Wins should be celebrated and staff should be rewarded for these.